INSPECTION AS AN AID TO EFFECTIVE BANK MANAGEMENT
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INSPECTION AS AN AID TO EFFECTIVE BANK MANAGEMENT
INSPECTION AS A HELP TO EFFECTIVE BANK MANAGEMENT
The role of the inspectorate department as an effective measure to Union Bank of Nigeria Plc was investigated in this study.
To guide the study, research questions were developed and questionnaires were used as a tool. The acquired data was analysed using sample percentages, and some of the findings include:
1) The inspectorate department is critical to management’s successful use of organisational information.
2) The internal audit (inspectorate) department improves management control in the financial organisation.
3) The availability of an inspectorate department promotes efficiency among banking staff.
4) The current statutory and other relevant regulations gave the inspectorate functions appropriate consideration.
5) The inspectorate department ensures financial accountability in the banking industry.
Based on the findings, the following recommendations are made, among others.
1) Inspectorate department employee training and retention for efficiency.
2) Establishment of an internal audit (inspection) department within the bank.
3) To ensure that the audit unit competent inspectorate is led by a professional.
CHAPTER ONE
BACKGROUND OF THE STUDY
Nigeria’s banking system is comprised of the central, commercial, merchant, development, and agricultural banks.
These financial institutions were founded to centralise money, purchase and sell securities, transfer and clear funds, and conduct other banking transactions. As a result, banking as a profession has existed for several decades,
but there was no widely acknowledged appropriate definition until 1958, when the Banking Act defined banking as the activity of receiving cash, assets, and securities from outside sources.
The purchase and sale of securities by banks, as well as the granting of loans based on maturity or the success of the business, led to the Hart definition of a bank or banker as a person or company carrying on the business of transferring money to assets and receiving monies from customers,
subject to the collection of draughts and honouring of cheques drawn on them from time to time by customers, up to the amount available on their current accounts.
The government agencies known as the Central Bank of Nigeria (CBN) and the International Monetary Fund (IMF) actively monitor and supervise these banking systems. This is to ensure that they provide services to their consumers while also keeping suitable business records.
Due to the requirement for accountability and effectiveness in the organisation, the bank’s management team implemented internal control (audit department). Among other departments in the banking industry, management pays special attention to internal control in order to plan and control cash inflows in the organisation for efficiency and sound management policy.
Under organisational efficiency, it is critical to build a follow-up process so that the firm’s performance can be assessed to determine whether the personnel structure, management plans and policies, and finance are performing properly. As a result of the aforementioned circumstances, the management function of managing becomes particularly desirable.
The bank’s management developed the internal audit unit, often known as the inspectorate division, to guarantee that appropriate procedures are followed. The inspectorate division is a critical component of the internal control system.
As a result, based on the circumstances of the Union Bank of Nigeria Plc, our study investigates the purpose, tactics, and requirements of a competent and efficient inspector, as well as its contribution to effective bank management resources.
1.2 STATEMENT OF THE PROBLEM
There is a reoccurring problem of bank managers extending loans (credit to customers over the discretionary limit as allowed by management) without proper collateral, resulting in loan losses.
The cases of increased bad debts resulting from loans issued to customers that have not been recovered, which causes problems for management finance, are now issued in report as a provision against bad debts in view of the requirement and potential guideline for bank licenced issued by the Central Bank of Nigeria and (CAMD 1990) company and allied matters decree of 1990 statutory requirement guideline.
There is also the issue of bank staff not paying attention to consumers, which leads to insufficient funds and a poor cash flow of the bank’s daily transactions.
The issue of disorganised organisational structure and line staff structure also contributes to the company’s low income. This is because managers in an organisation sometimes plan what to do, make decisions, execute, and collect funds from outside bodies or consumers, and as a result, irregularities in the account book arise, affecting the financial report for such firm.
Furthermore, the lack of economic stability and efficiency in bank transaction records kept by bank managers contributes to irregularities in financial books and records. As a result, these challenges are of great significance to financial organisation management and people who make significant contributions to the enlistment of societal issues.
Any effort made to address these issues should be viewed as a step in the right direction.
1.3 OBJECTIVE OF THE STUDY
The following is the study’s goal:
1) Identify and describe how inspection can aid in the achievement of effective finance on bank management.
2) Determine whether bank management grants loans in excess of the discretionary limit as approved by bank management without providing suitable security.
3) Determine the number of bad debts originating from loans granted to clients that have not been recovered, as well as whether enough provision is made for such debts.
4) To ensure that the financial department, as well as the internal cheque and accounting system, are designed and operated effectively.
1.4 SIGNIFICANCE OF THE STUDY
It is hoped that the findings of this investigation would be extremely beneficial to bank inspectors, external auditor examiners, the accounting profession, bank management, other activities in the banking sector, and the state.
It is envisaged that the execution of the requirements for successful inspection will promote objectivity in reporting as well as job security.
The implementation proposal is designed to alleviate the general apathy associated with inspection results. It is also hoped that when reports are created without any basis, it will push everyone involved to follow policies, standards, and processes, as well as promote the collaborative attainment of the bank’s objectives.
1.5 SCOPE OF THE STUDY
This study’s scope is intended to include the financial management functions regulating with special references to its aid in effective bank management. Because it is hard to cover all of Nigeria’s banks, the researcher focused on Union Bank Nigeria Plc.
Furthermore, we limited our study to five separate branches, which included the area office, Ogbete, Ogui, Okpara Avenue, and Emene, where we obtained the majority of the necessary information.
The reasons for this decision are time and budgetary constraints associated with travelling to all of the bank’s branches around the country.
The time allowed to submit the research work was also one of the factors that led to the areas picked by the researcher for the investigation, as time was to thoroughly exhaust all materials required for this research effort.
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