ROLE OF NIGERIA DEPOSIT INSURANCE CORPORATION IN THE BANKING SECTOR
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ROLE OF NIGERIA DEPOSIT INSURANCE CORPORATION IN THE BANKING SECTOR
INTRODUCTION TO CHAPTER ONE
1.1 STATEMENT OF THE PROBLEM AND THE OBJECTIVE OF THE STUDY (THE PURPOSE OF THE STUDY)
Over the years, the federal government has been faced with the problem of insolvent banks’ debt-owned depositors. The government sees this as a major issue because as more banks are licenced, the federal government faces increased exposure.
After critically examining the problem, the government decided to establish an organisation called NDIC (Nigeria deposit insurance corporation) to take full charge of depositors’ funds in collaboration with the Central Bank of Nigeria (CBN). The idea of establishing an NDIC in the country was welcomed in order to deregulate the banking sectors.
The autonomy of the financial industry is required if progress and worldwide standardisation are to be realised. Economic freedom is gonna become a reality.
The problem of government meddling in bank operations spurred the formation of the organisation. The government may only regulate the actions of banks that are owned by the government or have been incorporated by law,
and what I mean by incorporated is by paying the recapitalization requirement (#256) introduced by the CBN governor in 2004.
The following are the study’s objectives:
v To assess the issues associated with fund misappropriation.
v Examine bank depositor fund insecurity
v To look into the causes of bank collapses.
v Understanding the roles of the CBN and the NDIC in preserving depositor funds
v To determine the cause of the century’s extraordinary unit bank expansion.
v To determine whether banks are retaining legal reserves improved by the CBN for day-to-day recording.
v To eliminate fraud among bank executives
v To eliminate hardship in the Nigerian banking sector’s incorporated banks.
1.2 POSSIBLE RESULTS OF THE STUDY
The study was conducted to learn about the NIDC roles in the banking sector.
v To learn how the Nigeria Deposit Insurance Corporation monitors bank activities.
v To understand the NDIC’s duties in national economic, financial, and monetary administration.
v To learn why some banks in our country are in trouble.
v To understand the significance of the NDIC in the banking sector
v To learn about some of the instruments utilised by the NDIC to regulate banking activity.
v To fund some of the issues that are confronting the banking industry.
v To eliminate fraud in the financial sector by activating the NDIC
1.3 THE IMPORTANCE OF THE STUDY
Throughout the process (information) I have acquired in my study which I have gone through, I realised that the NDIC and banks,
as well as my followed student in this field, will benefit from this my study because it will make them add more seriousness on their activities and, in particular, the NDIC will put more effort in their role in banks.
Academically, my peers will benefit the most from this study by understanding the role the NDIC plays in our financial sectors. The study will also assist our country.
1.4 DEFINITIONS OF TERMS
The terminologies used in the field of research are simply defined as follows:
Nigeria
This is the longest country in the African context’s western area. It had a population of well over 120 million people at the end of 1990. God has blessed the land with a variety of resources, both human and natural.
The oil business is currently the country’s primary source of finance and global recognition. Nigeria is a multi-tribal country with English and French as official languages.
Deposit
This is the amount, percentage, or ratio of money that an individual, group of people, or company keeps with an individual, group of people,
or company that has been licenced by the corporate affairs commission to operate as a bank or financial house for the purpose of withdrawal at any given time, and which must attract some interest.
Insurance:
Oxford Learners Dictionary defines a contract as “a contract made by a company, society, or the state to provide a guarantee to compensation for loss, damage, or linens.” Death, for example, does not apply since the truth about what the intending policyholder intends to insure must be disclosed to the insurer in order for the contract to be legal.
Corporation
Oxford Learners Dictionary defines this as “a group of people with authority to operate a single unit with a separate legal existence.”
Role
As defined by Oxford Learners Dictionary, the role taken or performed by an individual, group of people, or company in achieving a goal.
Banking industry
This is the government sector in charge of the country’s financial affairs. Major actors in this sector include commercial banks, merchant banks, community banks, and so on. This industry is still the lifeblood of any country’s economy.
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