CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF STUDY

In recent time the Nigeria Bank Sector was experiencing some problem and in its performance and operation which is more as result of failing nature of banks in the Nigeria economy.

The problem in great the line competitive of the stream turning of the reputation of the Nigeria banking sector among its international counterparts in its performance, achievement and integrity.

The bid for the upgrade if this sector necessitates most of the Nigeria banks have problem with financial management in the commercialization of its resourceful strength to economies development as regarded then micro project financing and giving out of loan recidessly without repayment insurance of the banking industry and as well as stronger effective and efficient financial system.

In order to save the heads of failing banks from the dirty player of dispatching from the banking sector has led management of the bank to dealing of take profit and untimely adjustment of their balance sheet, which tend to hid their true financial position in the banking sector, this include the centre management and the monitoring committee of the Central Bank of Nigeria in the control of the bank with this false instruct.

It was in the view of finding last solution to the economy saga, that Central Bank of Nigeria in 2004.

Unveil its reform amender as per Nigeria a banking sector in controlling with the old goals through the federal ministry of finance which was tagged this reformation as N25 billion on the recapitalization of bank with regard to the premium capital base of N2 billion it was through this that the bank from the 89 operational banks to 25 banks with stronger management and wealth capital base. This untaken the sentence of management of the as they fails to meet up with the dead line for adherence to this principle set aside by the Central Bank of Nigeria on 31st December 2005.

Although it has not been lazy to carry out this national reform, the Central Bank of Nigeria through the leadership of Professor Charles Soludo first compelled the banking sector of the economy to adhere strictly to this reforms policy at it set aside and instrument for the failed banks out of the 89 banks in the sector “the Central Bank of Nigeria reader 11 banks to uncontrolled and 62 to be sound” with 300 branches as compared to only 8 bank in South Africa with 4500 branches. Only 5 out of the 89 banks were able to recapitalize to N25 billion, actually causes the need for the vane reform policy make the Nigeria banking sector not be spectators sent to active plague in the ongoing world.

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