CHAPTER ONE:

INTRODUCTION1.1 

Background of the Study

In every economy, there exist facilities for the creation, custodianship and distribution of financial assets and liabilities (Mohammed, 2002). These facilities make up the financial system in any economy of which banking is a sub-sector. Banks are global phenomena, a universal institution. In fact, banks intermediate between surplus and deficit economic units, thereby, acting as machinery for the allocation for the allocation of scarce financial resources. (Mohammed, 2002). Consequently, banks occupy a primary position in the economy as it is the fulcrum of the money market and the central nervous system of the economy. The banking industry world wide, and in Nigeria particularly, had been witnessing a lot of structural changes. These changes are meant for the improvement of services for the betterment of it operators and for the benefit of the customers, shareholders as well as the economy at large.In Nigeria, the business of banking has not been Stagnant, the advent of the British political and economic influence brought about the evolution of banking in Nigeria. This is as far back as the last decade of 19th Century, precisely in 1892. The first Commercial bank in Nigeria “the British African Banking Corporation(BABC)” was formed in that year (Onanuga, 1998.) Ever since the first bank was formed, the banking industry had witnessed a lot of changes. In July 1958 for instance, in recognition of its importance at that time, the Central Bank of Nigeria was formed as the apex bank in Nigeria under the Central Bank of Nigeria Ordinance cap 30 of portfolio olio 1958, (Agom, 2000). The bank is saddled with the responsibility of supervising and monitoring banking activities in Nigeria. Another boost of the industry came up in 1961 when another history was recorded in the banking arena with the establishment of the first Merchant Bank – PHILIP HILL LTD

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