THE
IMPACT OF SUPERVISORY ROLE OF CENTRAL BANK OF NIGERIA ON PERFORMANCE OF COMMERCIAL
BANKS IN NIGERIA.
(A
STUDY OF UNION BANK OF NIGERA PLC, LOKOJA, BRANCH).
BY
200S/HND/BAMS/149
BEING
A PROJECT SUBMITTED TO THE DEPARTMENT OF ACCOUNTANCY KOGI STATE POLYTECHNIC,
LOKOJA IN PARTIAL
FULFILLMENT
OF THE REQUIREMENT FOR THE AWARD OF
HIGHER
NATIONAL DIPLOMA (HND) IN BUSINESS
ADMINISTRATION
AND MANAGEMENT STUDIES
OCTOBER,
2010.
ABSTRACT
This project was carried out on the
topic "The impact of supervisory role of
Central Bank of Nigeria on the
performance of commercial banks in Nigeria. (A case study of Union Bank of
Nigeria PIc Lokoja, Kogi State). The objective necessitating this study is to
identify and highlight the contribution of supervisory role of Central Bank in
performance Technological conductive to the Global Banking. To aid in this
literature were received Twenty (20) were administered to the staff of the Bank
and Twenty (20) were returned, the simple percentage method of analyzed was
used based 0 the analysis the following finding were received that the capital
base of the Bank is enough to sustain a supervisory role of Central Bank of
Nigeria and the Bank have enough skills manpower to carry out a supervisory
role of Central Bank. In the light of the above finding the following
recommendation were made that the Central Bank of Nigeria should direct the
commercial Bank and the sector of the economy in which they are permitted to
rent much loan on timely basis and the Central Bank of Nigeria should device
appropriate monetary polices to regulate the affair of commercial bank in
Nigeria.
TABLE
OF CONTENT
Title
Page
Approval
page
Dedication
Acknowledgement
Abstract
Table
of content
CHAPTER
ONE: INTRODUCTION
1.1
Background of the study
1.2
Statement of Problem
1.3
Objective of the study
1.4
Research Question
1.5
Statement of Hypothesis
1.6
Significance of study
1.7
Scope and Limitation of the study
1.8
Definition of term
1.9
Organization of study
CHAPTER
TWO: LITERATURE REVIEW
2.0
Concept of central banking.
2.1
Traditional function of central bank
2.2
Monetary Policy formulation and implementation
2.3
Objective of monetary policy
2.4
Banking supervisory by CBN
2.5
Review of banking supervision
2.6
Instrument of monetary and credit policy of central bank
2.7
Rational for banking supervision
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction
3.2
Research Design
3.3
Population of the study, sampling and sampling techniques
3.4
methods of Data collection
3.5
Procedure for Data Analysis and Model Specification
3.6
Justification of methods of Data collection and Analysis
3.7
summary
CHAPTER
FOUR: DATA PRESENTATION AND ANALYSIS
4.1
Introduction
4.2
Data Presentation and Results
4.3
Discussion of Findings
4.4
Summary
CHAPTER
FIVE: SUMMARY AND CONCLUSION
1.1
Summary of finding
1.2
Conclusions
1.3
Recommendation
Bibliography
Appendix
46
CHAPTER ONE:
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY.
People
need to keep their valuable with a well established and trusted organization so
as to enable them get hold of it whenever they need them e.g. money, materials,
documents etc. these are called banks. Despite their being well established and
organized, they can be owned by an individual, group, community e.t.c. in order
not to have any doubt about any of which are operated, with the Federal
Government set up a governing body to monitor all the individual banks
collectively to meet the demand of the people. The governing body is known as
the Central Bank of Nigeria (CBN). CBN is a government established body set up
to monitor the performance of commercial banks. This is done by laying an
outstanding rule which the commercial bank must strictly adhere to wand
otherwise face the consequence if they fail to obey part of the monitory of CBN
on commercial bank are they give guidelines on interest rate, exchange rate, their
liquidity i.e how financial strong their bank look like etc.
Due
to the constraint monitoring and governing of commercial bank they stand
reliable. Impact of the supervisory role of central bank of Nigeria on the performance
of commercial bank to maintain a sound financial stability and to ensure
commercial bank confident.
The
reason why the researcher is interested in this topic is to find out, if the
role reforms policy of the central bank of Nigeria prescribed to the commercial
bank are strictly adhere to by the management of the banks.
Central
Bank of Nigeria is known to be the banker of commercial bank in which they
accept deposit from the commercial bank. Also in wanting to find out the
control of Central Bank of Nigeria bring our attention on how the monetary
polices is being implemented by the commercial bank, maintenance of minimum
capital base and risk base supervision. This bring us to know how the Central
Bank of Nigeria monitors the commercial bank that is to bring to our notices as
to how the liquidity of the bank is, which is telling us on the financial back
up of the commercial bank.
Furthermore
to make sure that the rules governing the interest and exchange rate are not
violated knowing fully well that the monetary polices rate (MPR) determine if
the interest rate should be high or low.
Another
interesting part initially is that they used to give corporate governance on
all commercial bank but due to the reform of Central Bank of Nigeria they
device a strategy that governor each commercial bank by their risk management.
All
individual bank customers attempting to take loan no matter how much or wanting
to exchange other currency to another will want a fair interest rate which is
govern by Central Bank of Nigeria.
1.2 STATEMENT OF PROBLEM.
The Central bank of Nigeria serves as one of
the regulatory agency concerned with
the supervision and regulation of commercial banks in Nigeria. Thus CBN have
had to contend with issue of raising the quality of bank supervision and bank
operations to a world standard.
However,
there exists some problem in the supervision of banks which according to some
scholars like Coen & Heartier, (2005) Thatcher,(2005) argued that the
regulatory complexities with the business environmental regulations appear to
create difficulties for potential
entrants.
1.3 OBJECTIVE OF THE STUDY.
The
general objective of this study is the determine impact of the supervisory role
of Central Bank on the performance of commercial bank in Nigeria. The following
are the specific objectives of the study.
ü To
ascertain how Central Bank of Nigeria monitors activities of commercial banks.
ü To
identify the step at which CBN monitors the interest and exchange rates of
commercial bank.
ü To
know if the commercial bank complies with the rules conferred to them by C.B.N.
ü To
proffer recommendations as to how best central bank can supervise the
commercial banks.
1.4 RESEARCH QUESTION.
This
study shall examine the following questions:
To
what extent does the supervision of central bank of Nigeria has on the
performance of commercial banks in Nigeria?
1.5 STATEMENT OF HYPOTHESES.
The
following relevant research hypotheses are provided to guide to study.
HI:
Closed watch on commercial bank by C.B.N can increase their performance.
Ho:
Closed' watch on commercial bank by C.B.N cannot increase their performance
HI:
The supervisory role of CBN on commercial bank can enhance efficiency.
Ho:
The supervisory role of CBN on commercial bank cannot enhance Efficiency.
1.6 SIGNIFICANCE OF THE STUDY.
This
study is important in several ways the work is intended to be benefit to the
government, business research, customers and all the commercial bank under
review.
Below
are some of the importance of the study: -
o
To provide a benchmark against which the
success of Central Bank can be measured.
o
It will enable the Central Bank of
Nigeria (CBN) to examine its roles in the development and regulation of
commercial banks.
o
It shall stipulate the attainable way of
solving the problem faced by bank at implementing commercial banks.
o
To educate the members of the public on
commercial bank issues.
1.7
SCOPE AND LIMITATION
In
scope, this study shall focus on the impact of supervisory role of Central
Bank
on the performance of commercial bank especially Guarantee Trust Bank where I
will limit my study. This project work will cover some aspect of commercial
bank reform programme.
This
constitutes a limitation of time and financial resources, materials equally
constitute a limitation to this work. The success of this work is a function of
the responses from the interview and questionnaire. Some of the respondents are
reluctant to disclose some useful information which was also a constraint.
1.8
DEFINITION OF TERMS.
The
researcher could define some terms which will be strength and very useful in
the research work;
CENTRAL
BANK OF NIGERIA (CBN): - This is the only financial
institution entrusted with the management and control of the national monetary affairs.
It is also the Apex of bank in Nigeria.
PERFORMANCE:
- To
act in accordance with the requirement or obligation of somebody or to carry out
through completion of an action.
SUPERVISION:
- To
be in charge of something and make sure that everything is done correctly.
INTEREST
RATE: - The extra money that you pay back when you borrow
money or that you receive when you borrow money. Or what you receive when you
invest money.
EXCHANGE
RATE: - The process of changing amount of one currency (the
money used in one country) for an equal value of another.
MONETARY
POLICY: - is defined as any method that is adopted by
government either to expand or contract money supply in the economy through the
Central Bank of Country.
LIQUIDITY
RATE: - This is used to measure a firm ability to satisfy it
short term obligation that is it's used to ascertain the short term solvency
and liquidity of a form.
1.9
ORGANIZATION OF THE STUDY
The
chapter one contains background of the study, statement of problem, objectives
of the study, research question, statement of the hypotheses, significance of study,
the scope and limitation of the study, definition of key terms used in the
study and organization of the study.
The
chapter two discuss the concept of central bank, the various function performed
by central bank, objective of monetary policy formulation and its
implementation, banking supervision by CBN, various literature review on
banking supervision, the various instrument of monetary and credit instrument
of central bank, the rational i.e the reason for banking supervision.
The
chapter three discusses the steps in carrying out the research work, the design
used in the research work, the definition of the population of the study, the
sample drawn and how it is drawn, the sources of data, the method use in
collecting data and the specification of model.
The
chapter four has introduction and presentation of data gathered for purpose of
the research work, discussion of findings and the summary of the chapter.
While
chapter five summarize all activities from chapter one to four, the conclusion
derived from the outcome of the study and recommendation for possible future
action.
CHAPTER TWO
LITERATURE
REVIEW
2.1 INTRODUCTION
This
chapter is designed to review such literature on the impact of the supervisory
role of Central Bank on the performance. In order to wider the vision of the researcher on the subject
matter under study. The review is carried out on such topics to facilitate an
in depth search for relevant concepts to commercial banks in Nigeria with singular
emphasis on Guarantee Trust Bank plc, Lokoja branch Kogi State.
2.2 CONCEPT
OF CENTRAL BANKING.
According
to Abiraj (1987), a Central Bank is the national institution that traditionally
possesses the monopoly of the issue of legal tender money in a country. It is
entrusted with the custody of the cash reserve of the banking system.
It
functions as a banker to banks and acts as lender of last resort. It usually
acts as banker and financial adviser to government and custodian and manager of
the nations' foreign exchange reserve.
Nationalism
was another important factor that accounted for the establishment of Central
Bank in different countries. Nationalism dictated that the national image of
each country should be adequately projected in international financial
relationship. Besides, the currency Board that existed (the West Africa
currency Board serve former British West Africa Countries, including Nigeria,
Gold coast, Sierra -lone and the Gambia). Where the automatic currency
exchanges institution with no monetary management function, no control of
banking operations, and were foreign in character and orientation. Thus,
indigenous Central Banks were required to reverse these trends and hence assume
control over monetary and banking issues in the affected territories. Such was
the background to the establishment of the Central Bank of Nigeria (CBN) in
1958, but its commercial operations started in July, 1959.
In
many developing countries, Central Bank was set up by government to perform the
traditional function similar to those of the more developed countries as well
as engage activity.
In
the promotion of Economic development; Unlike in developed countries where
developed financial systems were already carrying out sophisticated banking
function, Central Banking having been justified by the need to control the
existing financial system and promote the goal of national Economic development,
many developing countries had rudimentary financial system that were
predominantly, if not wholly foreign controlled. This there was the urgent need
in these economics to establish the necessary indigenous financial institution
and arrangement which could have been used to achieve the goal of their
respective national Economics.
2.3 TRADITIONAL FUNCTION OF CENTRAL BANK.
The
functions are unlimited thus; we have to discuss some of it which is as follows:
2.3.1 According to T.A. Udenwa (1997), It serves as
Banker to other banks: -As Central Bank of Nigeria (CBN) is to the federal
Government so also it does to other commercial banks, merchant banks,
development banks and other financial institutions. In this regard, all banks
in the country keep accounts with the CBN, this help in having smooth interbank
operations.
The supervisory department of the CBN
also examines and scrutinizes the books of these financial institutions to
ensure that they do not contravene existing banking rules and regulations. The
purpose is for the bank to promote and sustain reasonable banking services for
the public and ensures a high standard of conduct and professionalism in the
banking activities. The relationship however impose mutual obligation on both
side the CBN as a banker to other bank issue directive on cash reserve and liquidity
ratios prudential requirement, sectoral credit allocation and other activities
of bank. This is done through it monetary policy circular, which is issued at
the beginning of each fiscal year. Staff sanctions are usually imposed on bank
for non-compliance with monetary guide lines. It also act as the lender of last
resort under the new system of open market operation (Omo) in accommodating
temporary needs liquidation.
2.3.2
According to Fapounda (2002). It serves as currency
issuer and Distributor: - Economic transaction in the Nigeria Economic is to
large extending cash oriented. Consequently the bank currency issue function
which involves distribution safe custody of stock and management of orders constitutes
a vital part of day to day management of the economy Central Bank of Nigeria
(CBN) manages the country domestic and external debt in conjunction with
Federal Ministry of Finance. It is also empowered to issue debt instrument and
manage Federal government domestic debt on term and condition agreed upon by
the Government and the bank (CBN)
2.3.4
According to Allen (1982), it serves as foreign exchange
managers. This ensures that the mobilization and development of foreign
exchange disbursement and utilization are in line with economic priorities and
within foreign exchange budget.
2.3.5
According to Idris (2010), It provides facilities to entertain
public complaints, The (CBN) ensures that bank do not take advantage of their customers,
in addition to its supervisory activities the bank maintain public complaint
desk (PCD) at its head office and each of its branch and currency centre in the
state of the Federation Instance where bank are found to be unfair to their
customers appropriate sanction including fines are impose on such banks.
2.4 MONETARY
POLICY IMPLEMENTATION AND FORMULATION
The
quantity of money is a key determinant of price and inflation in nearly every theory
of the functioning of the economy.
According
to Williams (1981) Economic theories the quantity of money also plays a
significant role in determining the Economy level of real output and labour
employment. Given that the Federal Reserve System has the ability to influence their
quantity of money. We begin by considering the two ultimate economic goal or
objective. Monetary policy is formulated with the basic assumption that all
stake holder and van able necessary for the realization of the target
objectives will behave appropriately but this has and always been the case for
instance, the behavior of the fiscal variable has often been in consistent with
monetary policy objective and that has not monetary management any easier.
Furthermore,
banks remain the channel for the transmission of monetary policy.
However
a sound and healthy banking system, as the existence of basic infrastructure, such
as electricity and communication facilities that will support the modern technology
on which banking is hinged, is imperative for monetary policy implementation.
Beside operators in banking system are out to exhibit high ethical' standard
integrity and transparency. These are needed to build confidence on which sound
banking system is bed rocked. With such place it will be a lot easier to
attract the large proportion of funds out sides into the banking system their
by making monetary policy implementation more effective. Beside bank ovule it
as a moral duty to make realizable returns to C.B.N and other authorities to
facilities proper decision making.
In
general effective monetary policy implementation foster stability which is crucial
for the growth and development that re-enforce the need for the trust of monetary
policy to remain mostly non-accommodating (miller and vein hoose 1993) in
height of this we are going to hinges on monetary policy implementation.
MONETORY
POLICY BEFORE 1986. :
According
'to Clarkson (1989), as the analysis of the institution growth and
Structure
indicates that the financial system growing rapidly.
In
the mid's 1980 to 1990 the number of commercial bank rose from 29 in 1986 to 64
in 1995, decline to 54 in 1998 and currently to 25 in 2006 the economy environment
that guided monetary policy before 1986 was characterized by the Dominance of
the sector.
In
order to maintain price stability and healthy balance of payment position, monetary
management depend on the use of direct monetary instrument such as credit ceiling
selective credit control administered interest and exchange rate as well as
prescription of cash reserve requirement and special deposit. The most popular
instrument of monetary policy was the insurance of credit rationing Guidelines
which primarily set the rate of exchange for the loans and advance. The
sectoral allocation of bank credit in C B N guidelines was to stimulate the productive
sector and thereby system inflationary pressures. The fixing of interest rate
at relatively low level was done mainly to promote investment and growth.
Occasionally,
special deposits were imposed to reduce the amount of free reserve and credit
creating capacities of the bank minimum cash ratio were stipulated for the bank.
in the mid a such cash ratio were usually lower than those voluntary maintained
by the bank they prove less effective as a restraint on their credit operation.
From mid 1970 it becomes so difficult to achieve a monetary policy.
Generally
monetary aggregate, government fiscal deficit GDP growth rate inflation rate
and balance of payment position moved in undesirable direction compliance by
bank with credit guidelines was less than satisfactory.
The
major problem on monetary management were nature of monetary control frame
work, interest rate and non - harmonization of fiscal and monetary policy.
The
monetary control frame work which relied heavily on credit calling and selective
credit control failed to achieve the set monetary target as their implementation
become effective with time. The rigidity controlled interest rate regime especially
the low level of various rate encourage monetary expansion without promotion
rapid growth of the money and capital market.
The
low interest rate on government debt instrument did not sufficiently attract private
sector saver and since CBN was required by law to absorb the unsubscribed
portion of government debt instrument large amount of high powered money were
usually injected into the economy. In the oil boom era, monetization of foreign
exchange earnings resulted in large increase in government expenditure
which substantially contributed to monetary instability in the early' 1980s
oil receipt were not adequate to meet increasing level of demand and' since
expenditure were not rationalized government result to borrowing from central
Bank to Finance huge deficit.
Thus, the objective of monetary policy since
1986 as remained the same as in the earlier period the stimulation of output
and employment and the promotion of domestic and external stability. Monetary
policy under SAP was armed at including the emergency of market oriented
financial system for effective and efficient resource allocation.
The
raising level of fiscal deficit was indentify as a major source of
macroeconomic stability so monetary policy was used by inducing efficiency and encouraging
good measure of flexibility in bank credit operation the regulatory environment.
However,
the objective of monetary policy lies on the following.
1.
To create a conductive environment
2.
It facilitate proper decision making.
3.
It fastens stability which is crucial for the growth and development.
4.
Is also the way forward for leading and borrowing?
2.5 BANKING SUPERVISION BY C.B.N
According
to Porter (1990), banking supervision is conducted through data collection and analysis
of information from statistical return and visit to bank.
Is
to foster the public confidence in the banking system, and promote banking
habit and financial structure in the country. The Central Bank of Nigeria (C B
N) maintain a public complain desk (P C D) in its head office and each of its branches
in the state capital which the public can lodge any complain of a bank
Where
a case against a bank is proven the bank shall be made to make necessary amend
and pay appropriate penalties section are also impose on bank customers who
bridge the foreign exchange regulations.
The
operation of (C B N) is conditioned by the rapid institution and structural change
in the economy long ago there has been a moderate growth in the staff strength
of bank in response to its expanded responsibility. The C B N has also continued
its drive to computerize it activities in all its branches in response to these
challenges. Most users in all departments are regularly trained on information
technology to increase the knowledge and improved the bank supervisory role.
Banking
supervision enable the early detection of problems which bank and related
institution can or may experienced. Supervisory powers are vested in the director
of banking supervision and other official appoint.
Central
Bank of Nigeria (C B N) makes use of on - site and off - site method of supervision.
2.5.1
ON-SITE SUPERVISION.
According
to Dosi (1988), on - site supervision provides the means for appraising bank on
a continuous basis and' for suggesting improvement in performance standard. The
central Bank of Nigeria Decree 1991 gives the bank statutory authority to
examine license commercial bank to our set their book of account. The
supervision of the depository institution generally entails.
a) An
appraisal of the soundness of the institution assist.
b) An
evaluation of the adequacy of internal operation, policies and management.
c) An
analysis of key financial indicator such as capital earnings liquidity and
interest rate sensibility.
d) An
overall determination of the institution solvency.
e) Ensuring
that banking operation especially external transaction are being carried out in
accordance with standard accounting practices.
The
(Amel capital Asset management Quality earning and liquidity) rating is used as
an internal assessment guide to determine how sound a bank is. If in the process
of supervision, the Central Bank of Nigeria observe that the performance of a
bank is not satisfactory it may direct such a bank and advice its director on
the appropriate action to be taken to correct the situation. In serious cases,
a written agreement is issued to direct the bank to take necessary corrective
measure and if the weakness of the bank persists, C B N may design a plan to
provide managerial assistance.
In
case of exigency the board of Governor of the bank may approve the immediate or
temporary accusation of failed or problem banks. Occasionally, assistance may
be provided through C B N discount wind out to problem institution before their
acquisition or liquidation following the routine supervision of a bank, the
bank examine prepare a confidential report, this is forward by the governor of
the C B N together with recommendation for improved performance to the bank
with directive that report should be table at the meeting of board of
directors.
The
bank examines must forward it report to C B N within two weeks failure for the bank
to bank supervision attract stiff penalties.
2.5.2
OFF - SITE SUPERVISION.
According
to Dosi (1988), off - site supervision basically involves the analysis of bank
return to the C B N as statutorily required. In order to ensure that bank operation
and activities are reported as accurately as possible C B N direct that every
bank should appoint an external auditor approved by the bank.
Each
bank seeks the approval of C B N on the termination or resignation of the bank
external auditor gulling reason for such action.
It
is also possible that bank many required the auditor to disclose information obtained
in the course of the audit provide such disclosure is made in good faith and is
relevant to the bank supervision. The auditors is to ensure that prudential requirement
are adhered to and is mandate to forward copies of the bank internal report not
later than three months after completing each audit exercise to the bank. To
facilitate banking supervision, C B N introduced in 1990 a set of prudential
guidelines for licensed band under this
guidelines bank are to adopt the risk weighted measure of capital adequacy
recommended by Basle committee of the bank for international settlement (BIS).
They were to maintain not less than 75 percent of their risk weighted asset as
capital up till 1991 and not less than 8 percent from January 1992. Also 5
percent of a bank capital must be tier I or primary capital (paid up) capital
plus reserve.
Under
these directives, the C B N enforces the use of bank and other financial
institution of the statement of accounting recovering period ending on or after
31st December 1990. The prudential guidelines and the statement of accounting
guidelines specify the criteria to be used by bank for the classification of
loans made for such category to interest recognition with respect to classified
loans.
The
standard accounting also stipulate rules for classifying bank other asset as well
as the treatment of off balance sheet engagement.
The
C B N supervise bank to ensure their compliance with liquidity and other ratio
as well as with sectoral guidelines on credit in order to fulfill some development
objective e.g commercial bank and its subsidiary companies offering financial
and related services as to report on such companies along with their monthly
returns. As from 1994 only bank that meet up C B N guidelines on cash reserve
and liquidity ratio prudential guideline minimum paid up capital adequacy ratio
and sound financial management are allowed to expand credit.
2.5.3
REVIEW OF BANKING SUPERVISION
The
concept of banking supervision in general has been defined in different ways
form different fields, by various scholars.
Sanusi
(2009), defined banking supervision as the existence of a set rules of a defined
parameter within which financial institution are suppose to operate. This is
therefore achieved through monitoring system.
Uwellyn
(2000) defined banking supervision as a body of specific rule or agreed
behavior either imposed of government or other external agencies or self impose
by explicit or implicit agreement within the banking industry that limit the
activities and business operation of banks.
Giddy
(1984), defined banking supervision as the ability of banks to create money
through the extension of credit.
Bench
O. (1990), defined banking supervision as the ability of bank to maintain confidence
and stability manage monetary policy and fight against system risk and
collapses.
The
financial stability forum (2001) defined banking supervision as the ability of
a bank to ensure sound accounting and the enforcement of effective laws.
Heisman
(2001), says the prosperity and strength of the economy relies heavy upon the
proper and prudent function of the country financial system.
The
researcher's operational definition of banking supervision is the ability of C B
N to supervise the banks through the laid down rules and regulations to ensure
effective bank operation in Nigeria.
Gardener
(2002), in his study of bank supervision from the perspective of command and
control, says lawyers and bankers have different opinion as to how bank
supervision should be implemented.
The
finance definition of banking supervision is the act of monitoring the financial
performance and operation of bank in order to ensure that they are operating
safely and soundly and following rule and regulation.
Bank
supervision is conducted by governmental regulation and occurs in order to
prevent bank failure (internet searching).
Giddy
(1984) and Sheng (1999) provide four major reasons why banks should be
regulated. The first relates to monetary policy the ability of banks to create
money. Second as a channel of credit or investments, banks are involved in
credit allocation. Third banks are regulated to ensure healthy completion and
innovation by preventing the formation of carters. The fourth is for prudential
regulation reasons and to mitigate the problem of asymmetric information.
2.6 INSTRUMENT
OF MONETARY AND CREDIT POLICY OF CENTRAL BANK.
These
are the instrument used by C B N to regulate control the activities of commercial
banks. They include: -
I.
Reserve Requirement
II.
Credit Rationing.
III.
Credit Guidelines.
IV.
Moral Suasion.
V.
Financial Instrument.
VI.
Financial Markets.
RESERVE
REQUIREMENT: - According to Bredly (1986). The reserve requirements aim
at controlling bank liquidity and influencing the volume and not the direction
of credit. The reserve requirements in Nigeria include the variable cash ration
and variable liquidity ration.
The
objective of the variable liquidity in Nigeria is not only to confer on the CBN
and use of additional tool in banking system and consequently their ability to
create credit. The cash ration is aimed reducing the level of cash reserve balance
which the banking system should maintain with the Central Bank policy based on
the volume of their deposit.
CREDIT
RATIONING: - According to Idris (2010), the Central
Bank of Nigeria use the credit rationing measure to curb the amount of money In
circulation in the economy by rationing the credit granted to the public.
CREDIT
GUIELINES: - According to Bradly (1986), The Central
Bank of Nigeria a started involving it statutory power of direct control of
bank credit and advances to reflect the economic needs such credit took two
forms persuasive approach regarding the allocation of credit on a
sectoral basis and preserved credit guidelines approach stipulating
credit expansion limit over specified period.
Format
of credit guidelines to the bank is often stated by economic Circumstance and
the goal of the country. Punitive measure for default one set out in the
guidelines and bank are warned not to pass penalties to their customers.
MORAL
SUASION. According to T.A UDENWA (1997), this is simply a
process by which CBN makes known to commercial banks through informal discussion
the direction in which monetary policy to proceed and the contribution which is
expected of banks. Moral suasion is a gentle appeal to commercial bank to give
(40) forty percent of their loan to small scale industries usually the bank
comply. It's imperative to note here that moral suasion instrument do not stand
the test of time i.e. is no more applicable by the Central Bank rather a direct
system is put in place, this is as a result of the new reform of Central Bank.
However,
the instrument of monetary and credit policy employ by Central Bank of Nigeria
(C B N) in regulating commercial bank can be classified into general (quantitative)
and qualities instrument.
FINANCIAL
INSTRUMENTS: - According to Umoru (2009), these are means
of transferring purchasing power from the surplus units (savers and unders).
These instruments or financial assets constitute a liability to the units issuing
them and an asset to holders of such instruments. The financial system offers a
wide range of assets. Which are tailored to suit the time preference of both
under and borrowers? Such financial assets differ in term of maturity, marketability
and riskiness and example of such financial asset are: - Treasury Bills,
Treasury certificates, call money development loan stock and bonds.
FINANCIAL
MARKETS: - According to Umoru (2009), are complexes
of institutional arrangement that facilitates the intermediation of funds. Such
markets are money markets, which deal in short term funds. And it is a place
where short terms securities are bought and sold e.g T.B, TIC and call
money etc. whereas capital markets deal on long term funds. That is it a place
where long term financial instrument are bought and sold e.g debentures, stock
share and government securities etc.
QUANTITATIVE
INSTRUMENT
In
performing their various functions financial institutions are expected to ensure
prudent management of asset and guarantee the safety of customer funds.
The
regulation of the financial institution are evolve to solve many goal including
protection of depositor ensuring monetary stability encouragement of efficient
and competitive financial and protection of customers interest.
QUANTITATIVE
INSTRUMENT
According
to Idris (2010), the qualitative instrument unlike the quantitative ones strives
to supervise the flow of bank credit into different activities in the
countries. Among the instrument of qualitative selective credit the margin
requirements.
Direct
control of bank is the extent of government intervention of government-becomes visually
the only element of control. This may result in conflicting and self
contradicting objective when they are taking into conjunction with other
instrument margined requirement on the other hand is essentially a qualitative
method of credit control which enable monetary authority like the C B N to deal
with different sectors n the credit market independently.
2.7 RATIONALE
FOR BANKING SUPERVISION
According
to Oxford Advanced leaner’s Dictionary 80th edition that is the principle or
reason which explain a particular decision, course of action.
Commercial
bank is supervised for many reasons among which are:
1. Banking
supervision is carried out as a means of enforcing the directive of monetary
authorities.
2. Bank
is supervised to ascertain that the proportion of non-performing loan in bank
portfolio is minimized. Generally the main purpose of banking supervision is to
evaluate bank loan portfolio internal control system and management practice.
Bank examines scrutinize documentation collateral of most large loan and the
same of small loans.
3. Efficient
supervision provides the basis for earliest intervention which is erratically
factoring protecting the health of the financial system.
4. To
minimize the risk of failure that could lead to the loss of depositor funds. The
failure of more banks and systematic financial stress is as a result of
multiple contractions in money supply.
2.8
SUMMARY
In
this chapter, we try to examine the historical concept of central bank of
Nigeria. The traditional function of CBN performed for commercial banks and the
Government. The monetary policy implementation and formulation I went further
to state the objective of monetary policy, discuss banking supervision in
Nigeria and the two method used by CBN which are the on-site supervision and
the off-site supervision went ahead to review banking supervision. I discuss
the instrument of monetary and credit policy of central bank, and explain the
rationale or reason for banking supervision.
CHAPTER THREE
3.1
INTRODUCTION
The
purpose of this chapter is to explain the various data used for report writing during
the research activity. Some selected topics such as research design, the research
population sampling method, the area of the study; method of data collection
administration of instrument and method of data, validation of instrument analysis are explained.
The
general objective of research methodology is to assist the researcher on comprehending,
in the evident possible sense, the process involved in an investigation.
3.2
RESEARCH DESIGN
The
design of this study adopts simple method of data collection involving personal
interview and administration of questionnaires in preparing the research study.
The researcher also made use of tables and simple percentage as the basic
instruments of data analysis.
3.3
POPULATION OF THE STUDY, SAMPLING AND SAMPLING TECHNIQUES
The
staff of Guarantee Trust Bank Plc Lokoja, form the research population of this
study. The population of the bank is fifty two (52) workers which consist of
the top management, middle management and junior staff of the bank. The number
of top management were two (2), six (6) for the middle management and forty
four (44) Junior Staff of Guarantee Trust Bank Plc Lojoka Kogi State.
The
sampling techniques used in this research work are random sampling.
Therefore,
the respondents were selected based on the knowledge they possess To provide
answers to the questions in the questionnaires.
The
sample of Twenty (20) respondents was selected randomly from GTBANK PLC.
3.4 METHOD OF DATA
COLLECTION
This
research used questionnaires and personal interview method legally as instruments.
Questionnaires which are set of question which raise enquires on the effect of
supervisory role on the Nigeria banking sector, were distributed to the staff
of the organizations; similarly, some staff were picked randomly and some
enquiry were made by the researcher on issues that were in the questionnaires.
Answers
to such enquires were noted. The research questionnaires are divided into two
(2) parts.
Part
A of it deals with personal data about the respondent.
Age
Sex
Educational
background
Years
of experience.
While
the second part of the research questionnaires is on the questions which are
relevant to the topics under investigation.
3.5 PROCEDURE
FOR DATA ANALYSIS AND MODEL SPECIFICATION
There
are many methods that can be used in the administration of instrument in any
research work, but in this study, the questionnaires and personal interview
were used because of the level of its reliability.
Questionnaires
were administered to different respondents personally and they were told what
was expected from them. The questionnaires were given to staff that had a clear
knowledge about the research topic.
Following
the administration of instrument, the data were analyzed. The method use in the
analysis of response was expressed in table and chi-square text is used so that
the work would be presentable in a clear and understanding manner.
Also,
included in the analysis is a tabular representation of the item as question retrieved,
each consist the response and the number of respondents?
Chi
- square formula
X2=
Where
0 =is the observed frequently.
E
= Expected frequently
X2
= Chi = Square.
3.6 JUSTIFICATION OF METHODS OF DATA
COLLECTION AND ANALYSIS
Personal
interview and questionnaires were used for the research work. It is valid
because it is mainly complied being the most accurate and convenient method in
this study.
The
validity was also attested by some experts in the department of math's and statistics,
and computer department; Kogi State polytechnic Lokoja and outside the school
premise and they attested to it that the instrument to be used will yield a
valid and reliable result. The expert also said that the study will go a long way
in helping most the commercial banks in7 Lokoja and their customers.
The
questionnaires used for the research work consist of Twenty (20) designed to
provide answers to Twenty (20) question set for this research work.
Questionnaires
were distributed to bank staff both senior and junior staff.
SUMMARY
Throughout
the section, which deals with the methodology, the researcher used primary
source to find out basic fact about the case under study. The researcher also
used Chi square method to analyze data which will be in details in the next
section.
This
section enables the researcher to gather information that will enable her carry
out her research work effectively.
CHAPTER
FOUR
DATA
PRESENTATION AND ANALYSIS.
The
chapter is to present, analyze and interpret the data collected during the research.
The
analysis is used mainly on data collection from the entire question in the questionnaires:
4.1
PRESENTATION OF DATA
Data
presentation is an integral part of a research work because it enables the data
obtained from the respondents to be statistically analyzed. It also enables the
data obtained from the respondent to be statistically analyzed. It also enables
the researcher to have concise findings from the result of the analyzed data.
Out
of twenty (20) questionnaires administered in the course of this investigation all
of them were duly completed and returned. The twenty analyses below are Base on
the twenty (20) questionnaires.
4.2
DATA ANALYSIS
The
examination of the characteristics of each item on the questionnaires is necessary
as this will be of great important in the discussion and interpretation of the result
of research findings.
The
instrument of data analysis used by this researcher in this study is
percentage.
TABLE4.2.1
SEX DISTRIBUTION OF RESPONDENT.
|
Alternatives
|
No. of Respondents
|
Percentage
|
|
Male
|
15
|
75%
|
|
Female
|
5
|
25%
|
|
Total
|
20
|
100%
|
Source:
Field Survey 2013.
Table4.2.1
shows the distribution of respondent according to sex variable. Fifteen (15)
were male representing 75% of the total respondent, and five (5) were female representing25%
of total respondent.
TABLE
4.2.2 DISTRIBUTION OF RESPONDENT.
|
Alternatives
|
No. of Respondents
|
Percentage
|
|
20-25
|
3
|
15%
|
|
26-30
|
5
|
25%
|
|
31-35
|
10
|
50%
|
|
36above
|
2
|
10%
|
|
Total
|
20
|
100%
|
Source:
Field Survey 2013.
Table
4.2.2 show the majority of the respondent are within the ages of 31-35 years
representing 50% of the total sample followed by these range; 26-30 which are five (5) respondents
representing 25% of the total of respondents, next are those within the range
of 20-25 years and 36 years above representing 15% and 10% of the total
respondents respectively. It implies
that those that are within the range of 31- 35years are the majority in the
distribution.
TABLE
4.2.3 MARITAL STATUS DISTRIBUTION.
|
Alternatives
|
No. of Respondents
|
Percentage
|
|
Single
|
15
|
75%
|
|
Married
|
5
|
25%
|
|
Total
|
20
|
100%
|
Source:
Field Survey 2013.
Table4.2.3
Shows the result that fifteen (15) respondents representing 75% of the total
respondent that are single, while five (5) respondent representing 25% of the
total respondents are married.
This
implies that the single are more than married in the organization, and they can
have time to concentrate on their work.
TABLE
4.2.4 EDUCATION QUALIFICATION OF RESPONDENT.
|
Alternatives
|
No. of Respondents
|
Percentage
|
|
WAEC/GCE
|
0
|
0%
|
|
NCE/ND
|
12
|
60%
|
|
HND/BSC/MSC
|
8
|
40%
|
|
Total
|
20
|
100%
|
Source:
Field Survey 2013.
Table
4.2.4 shows the education qualification of the respondents. This indicates that
twelve (12) respondents representing 60% of the total respondents attained NCE/ND
certificate, while eight (8) respondents attained their higher degree.
TABLE
4.2.6 LEADERSHIP QUALITY ADVERSELY AFFECTS THE
IMPACT
OF THE SUPERVISORY OF CBN ON COMMERCIAL BANK?
|
Alternatives
|
No. of Respondents
|
Percentage
|
|
Strongly
Agreed
|
4
|
20%
|
|
Agreed
|
8
|
40%
|
|
Strongly
Disagreed
|
0
|
0%
|
|
Disagreed
|
8
|
40%
|
|
Total
|
20
|
100%
|
Source:
Field Survey 2013.
Table
4.2.6 reviewed that 4 respondents representing 20% of the total sample strongly
agreed, while 8(40%) also agreed that leadership quality adversely affect the
impact of the supervisory role of CBN on commercial bank while eight (8)
respondents representing 40% of the total respondents disagreed with this
assertion. This implies that majority agreed that leadership quality has effect
on the supervisory role of CBN on commercial bank.
TABLE
4.2.8 THE INTEREST RATE POLICY OF CBN ON COMMERCIAL BANKS IS UNBEARABLE?
|
Alternatives
|
No. of Respondents
|
Percentage
|
|
Strongly
Agreed
|
2
|
10%
|
|
Agreed
|
3
|
15%
|
|
Strongly
Disagreed
|
10
|
50%
|
|
Disagreed
|
5
|
25%
|
|
Total
|
20
|
100%
|
Source:
Field Survey 2013.
Table
4.2.8 shows that 2(10%) and 3(15%) of the respondents strongly agreed and
agreed that Interest rate policy of CBN is unbearable on commercial banks while
10 (50%) and 5(25%) of the respondents strongly disagreed and disagreed. This
implies that the interest rate policy of CBN on Commercial Banks is bearable.
TABLE
4.2.9 THE OPEN MARKET OPERATION IS A MAJOR INSTRUMENT THAT HAS IMPACT ON
COMMERCIAL BANKS?
|
Alternatives
|
No. of Respondents
|
Percentage
|
|
Agreed
|
19
|
95%
|
|
Disagreed
|
1
|
5%
|
|
Total
|
20
|
100%
|
Source:
Field Survey 2013.
Table
4.2.9 shows that Nineteen (19) respondents representing 95% agreed, while one
(1) respondent representing 5% disagreed. This implies that the open market
operation is the major instrument that has an impact on commercial bank.
TABLE
4.2.13 DOES CLOSE WATCH ON COMMERCIAL BANK BY CBN INCREASED THEIR PERFORMANCE?
|
Alternatives
|
No. of Respondents
|
Percentage
|
|
Agreed
|
17
|
85%
|
|
Disagreed
|
3
|
15%
|
|
Total
|
20
|
100%
|
Source:
Field Survey 2013
Table
4.2.13 shows that 17 respondents representing 85% believe that close watch on commercial
bank by CBN increase their performances, three (3) respondent representing 15%
disagreed. This implies that the close watch on commercial banks by CBN
increased the banks performance.
TABLE
4.2.14 THE IMPLEMENTATION OF SUPERVISORY ROLE OF CENTRAL BANK OF NIGERIA WILL
HAVE EFFECT ON THE NIGERIA ECONOMY?
|
Alternatives
|
No. of Respondents
|
Percentage
|
|
Agreed
|
17
|
85%
|
|
Disagreed
|
3
|
15%
|
|
Total
|
20
|
100%
|
Source:
Field Survey 2013
Table 4.2.14 shows that 17 respondents
representing 85% of the respondents agreed that the implementation of
supervisory role has effect on the
Nigeria
economy while 3 respondents representing 15% of the sample disagreed. This implies
that the implementation of supervisory role has effect on the Nigeria economy,
because the majority of the respondent agreed.
TABLE
4.2.15 THE SUPERVISORY ROLE OF CENTRAL BANK HAS
CONTRIBUTED
TO IMPROVED SERVICES IN YOUR BANK?
|
Alternatives
|
No. of Respondents
|
Percentage
|
|
Agreed
|
18
|
90%
|
|
Disagreed
|
2
|
10%
|
|
Total
|
20
|
100%
|
Source:
Field Survey 2013
From
the table 4.2.15 it shows that 18 respondents representing 90% agreed while 2 respondents
representing 10% of the sample disagreed that the supervisory role of central bank has contributed to
improved services in their bank. This Implies that the supervisory role of
central bank has contributed to improved services
in their
bank.
TABLE
4.2.16 THE SUPERVISORY ROLE OF CENTRAL BANK ON COMMERCIAL BANKS CAN ENHANCE EFFICIENCY?
|
Alternatives
|
No. of Respondents
|
Percentage
|
|
Agreed
|
19
|
95%
|
|
Disagreed
|
1
|
5%
|
|
Total
|
20
|
100%
|
Source:
Field Survey 2013
Table
4.2.16 shows that (19) respondents representing 95% agreed that the supervisory
role of central Bank can enhance efficiency, while one (1) respondent
representing 5% disagreed. This implies that the supervisory role of central
Bank can enhance efficiency.
4.3 TEST OF HYPOTHESIS
The
statistical tool used in testing to hypothesis is chi-square (X2).This
denoted by Greek letter X2 and is used frequently in testing
hypothesis concerning the difference between a set of observed frequency of
sample and corresponding set of expected frequency.
Formula
where:
X2 = Chi square
O = Observed
frequency
E = Expected
frequency
HYPOTHESIS
ONE
From Table 4.2.13:
HI
- closed watch on commercial bank by CBN increase their performance.
Ho
- closed watch on commercial bank by CBN cannot increase their Performance.
X2=
∑ (O - E)2
E
|
|
O
|
E
|
O-E
|
(O-E)2
|
(O-E)2
E
|
|
Agreed
|
17
|
10
|
7
|
49
|
4.9
|
|
Disagreed
|
3
|
10
|
-7
|
49
|
4.9
|
|
Total
|
20
|
20
|
0
|
98
|
9.8
=T-observed
|
Degree
of Freedom: (n-1); where n= Numbers of categories
N=
2; n-1= 2-1=1
At 5% level of significance = 0.05
From the Chi- square table t-critical =3.841
DECISION
RULE:
This states that if t- observed is lower than
t-critical, the null hypothesis (Ho) will be accepted. But if t- observed is
greater than t-critical, (H1) will be accepted and the Ho rejected. From our
table above the t-observed is 9.8 while the t- critical is 3.841. Therefore;
the null hypothesis (Ho) is rejected.
TEST
OF HYPOTHESIS TWO
From
Table 4.2.16 :
H1:
The Supervisory role of Central Bank on Commercial banks can enhance
efficiency.
Ho:
The Supervisory role of Central Bank on Commercial banks cannot enhance
efficiency.
X2=
∑ (O - E)2
E
|
|
O
|
E
|
O-E
|
(O-E)2
|
(O-E)2
E
|
|
Agreed
|
19
|
10
|
9
|
81
|
8.1
|
|
Disagreed
|
1
|
10
|
-9
|
81
|
8.1
|
|
Total
|
20
|
20
|
0
|
162
|
16.2
=T-observed
|
Degree
of Freedom: (n-1); where n= Numbers of categories
N=
2; n-1= 2-1=1
At 5% level of significance = 0.05
From the Chi- square table t-critical =3.841
DECISION
RULE:
This states that if t- observed is lower than
t-critical, the null hypothesis (Ho) will be accepted. But if t- observed is
greater than t-critical, (H1) will be accepted and the Ho rejected. From our
table above the t-observed is 16.2 while the t- critical is 3.841. Therefore;
the null hypothesis (Ho) is rejected.
4.4 DISCUSSION OF FINDING
The
researcher received answer from the respondent which proved that, some selected
commercial banks offer advice to beneficiaries of their bank.
However,
from finding if there is good corporate governance, transparency and management
framework the banking sector will be reformed for effective and efficient risk
management which brings about development in the economy activities of the
country.
Inadequate
financial resources is a constraint to banks in conjunction with one ability of
some of the beneficiaries to pay back the loan they received as at when due
together with the interest.
CHAPTER FIVE:
SUMMARY AND CONCLUSION
5.1 SUMMARY
This
research work is on the impact of the supervisory role of the Central bank of Nigeria
on the performance of the commercial Banks. A case study of Union Bank of
Nigeria.
Commercial
banks in Nigeria are largely unproductive due to the management of fund,
inadequate human and technological resources, inability to ascertain the sector
of the economy that needs financial assistance, poor response of borrowers to
pay their principal loan and interest as at when due and making adherence compliance
to CBN prudential guidelines. These problems have however made many Commercial
Banks to provide adequate service to interested individuals and corporate
bodies in terms of financial assistance, other sector of the economy will suffer
hardship.
In
view of this, Central bank of Nigeria needs to play a supervisory role over the
commercial banks for proper performance of their financial obligation in order
to improve the economic status of the country financial and banking wise. It is
seen from the research work that Central Bank of Nigeria supervisory role on
the commercial bank with emphasis on the instrument of monetary and credit
policy have improve the banking sector to a higher standard that is sure of
meeting the basic expectation of both individual and corporate bodies.
5.2 CONCLUSION
Commercial
banks play important role in the economic development of Nigeria, their
services to other sector of the economy must not be ignored. Most businesses
cannot function effectively if the banking sector is not well monitored.
The
commercial bank can easily and effectively discharge their financial services to
the economy if their operations are adequately monitored by the Central Bank of
Nigeria from time to time.
Central
Bank of Nigeria (CBN) supervisory role play over commercial banks especially in
this 21st century, have reduced the level of embezzlement and fraud among banks
and bankers, boost up the economy position of the country by providing greater
percentage of banks found in the appropriate sector that need urgent and
maximum national attention reduces number of unproductive (distress) commercial
banks to effective ones.
Central
Bank' of Nigeria (CBN) prudential guidelines issued from time to time has also
enable commercial banks to employ competent and qualified staffs that are capable
of managing the banking industry for a productive economy.
Above
all, the effect of CBN on commercial banks in this 21st century has positively boosted
up Nigeria economy in all area.
5.3 RECOMMENDATION
Adequate
supervision for the promotion of commercial banks in Nigeria should be made by
the central bank of Nigeria in order to have a better banking sector adequate
for meeting the financial assistance of other sector of the economy.
This
can be achieved through the following:
The Central Bank of Nigeria should
device appropriate monetary policies to regulate the affairs of commercial
banks in Nigeria.
The Central Bank of Nigeria ensures
monetary stability in the country and reduces the interest rate on commercial
banks which will in turn make easier accessibility of individual and corporate
bodies to source for short or long term funds.
The Central Bank of Nigeria should
direct the commercial bank on the sector of the economy in which they are
permitted to rent much loan on timely basis.
Central Bank of Nigeria should ensure
that commercial bank that fail in remitting their return are issued queries
fines in order to correct the loop hole in the banking industry.
Central Bank of Nigeria should ensure
that any commercial bank that cannot meet the minimum statutory capital of
twenty five billion should be forced to merge or be acquired by another bank.
BIBLOGRAPHY
AYUBA,
I. J. (2007) Money and Practices of
Banking in Nigeria. Lokoja: Richy Publishers and Printers.
BAMIRO
M. A. (1998) Banking Supervision Annual Report Examination and Supervision Department
of CBN.
FALEGA,
S. B. (1987) Residency Nigeria Financial
System. Ibadan: University press Limited.
LAWAL
K. O. and ABIMAJE N. Y. (2003) Basic
Principles Of Economic Volume 2. Lokoja: Richy Publishers and Printers.
OBERA
J. O. (2003) Money and Practice of
Banking in Nigeria. Lokoja: Oluwafemi Business Centre.
OGWUMA
P. A. (1997) Policy Measure of CBN Economic and Financial Sector: Billion Publication
of CBN Vol. - 117 (p) 260 April- June.
OLEKAN
J. K. (2001) The impact of Reform on the Performance of Financial Sector. Billion,
Publication of CBN Vol. 117 (p) 260 -270.
ONYIDO
B. C (1991) CBN Monetary and credit Policy Concept Administration and
guidelines. The Billion CBN Vol. - 15 No 1 page 75.
OWIYEDI,
H. (2001) Management Economic 6ed. U.S.A:
Vikas Publishing House PVT Limited.
UMOH,
J.C (1986) Economic and Africa
perspective. Lagos: John publication limited.
UMORU,
T. A. (2004) Basic research method
competence and application. Lokoja: 2nd edition printed and published.
APPENDIX
Department
of Business
Administration,
School
of Management Studies,
Kogi
State Polytechnic,
Lokoja,
Kogi
State.
rs"
September, 2010.
Dear
Respondent,
INTRODUCTION
LETTER.
I
am a HND 2 Final year Student of Business Administration of the above
Institution
conducting a research on Impact of Supervisory Role of Central Bank of
Nigeria
on performance of Commercial Banks. A case study of Union Bank of
Nigeria
PIc., Lokoja.
I
am sourcing for information concerning the above topic. All information will be
treated
with confidentiality please.
Yours
Faithfully,
IDRIS
SULEIMAN.
1
. . ,
46
-
QUESTIONAIRES.
Please
indicate your response by ticking only one box for each question.
Sex
- Male c::::J Female c::::J
2
Age - 20 - 25 years c::::J
36
and above c::::J
3
Marital Status - Single c::::J Married c::::J
4
Qualification - WASC/GCE c::::J NCE/OND c::::J HNDIB.SC
MSC
c:::J
26
- 30 years c::::J 31 - 35 years
SECTION
B
5
CBN effective supervisory role on Commercial Banks Performance can
solve
our economic problem?
a
Strongly Agreed [=:J
Agreed
c::::J
Strongly
Disagreed c::::J
Disagreed
[=:J
Leadership
Quality adversely affects the impact of supervisory role of CBN
on
Commercial Banks?
b
c
d
6
a
Strongly Agreed [=:J
Agreed
[=:J
Strongly
Disagreed [=:J
b
c
d
Disagreed
7
Implementation on Monetary Policy Effective Communication and Inflation
problem
on the challenge faced by CBN supervisory role on performance of
commercial
banks?
a
Strongly Agreed [=:J
b
Agreed [=:J
c
Strongly Disagreed [=:J
d
Disagreed
48
8
The interest rate policy of CBN on commercial banks is unbearable?
a
Strongly Agreed c.:J
b
Agreed c.:J
c
Strongly Disagreed c.:J
d
Disagreed
9
open market operation reserve requirement, discount rate mechanism and
selective
credit control are instrument used by CBN to control commercial
banks?
a
Strongly Agreed c:=J
b
Agreed c.:J
c
Strongly Disagreed c:=J
d
Disagreed
10
CBN interest rate and exchange rate contribute positively to the performance
of
commercial banks?
a
Strongly Agreed c.:J
b
Agreed c:=J
c
No Idea c:=J
11
The recent minimum capital base requirement by the CBN helps banks in
the
implementation of supervisory role strategy.?
a
Strongly Agreed c:=J
b
Agreed c:=J
c
No Idea c:=J
12
Your bank has the necessary skill of manpower to carry out the supervisory
role
of the central Bank?
a
Strongly Agreed c:=J
b
Agreed' c:=J
c
No Idea c.:J
49
b
a
b
c
13
Government will be able to ensure regulatory compliance and transparency
in
the banking sector if supervisory role of Central Bank is implemented?
Strongly
Agreed c=:J
Agreed
c=:J
d'
i
No
Idea c=:J
a
b
c
14
.
~; f \ .
The
Nigerian Banks will be able to manage the change that will result from
,
imp1e~J~ting
of supervisory role of Central Bank?
}.".
Strongly
Agreed c=:J
Agreed
c=:J
No
Idea c=:J
The
supervisory role of Central Bank will have positive effect on the
economy?
a
b
c
15
a
Strongly Agreed
Agreed
No
Idea
b
c
16
The capital base of your bank is enough to sustain a supervisory role of
Central
Bank of Nigeria?
Strongly
Agreed c=:J
Agreed
c=:J
No
I~~a c=:J
a
c
17
,
i
The
;jEconomic environment in Nigeria is conducive enough for banks to
,
function
effective and efficiency in the banking arena?
Strongly
Agreed c=:J
Agreed
c=:J
No
Idea c=:J
Your
bank is ready for the implementation of supervisory role of Central
Bank?
18
50
a
Strongly Agreed c=J
b
Agreed c=J
c
No Idea c=J 'I'
19
The supervisory role of Central Bank has any impact on customer
satisfaction?
a
Strongly Agreed c=J
b
Agreed c=J
c
No Idea
20
The supervisory role of Central Bank has contributed to improved services
in
your bank?
a
Strongly Agreed c=J
b
Agreed c=J
c
No Idea c=J
21
The implementation of supervisory role of Central Bank of Nigeria will have
effect
on the Nigerian economy?
a
Strongly Agreed c=J
b
Agreed c=J
c
No Idea c=J i,{J
51
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