THE 25 BILLION RECAPITALIZATION BY THE CENTRAL BANK OF NIGERIA AND ITS IMPACT ON COMMERCIAL BANKS
- Project Research
- 1-5 Chapters
- Quantitative
- Regression
- Abstract : Available
- Table of Content: Available
- Reference Style: APA
- Recommended for : Student Researchers
- NGN 3000
INTRODUCTION
Central bank of Nigeria is the apex financial institution in Nigeria charged with the responsibility of maintaining fiscal and monetary. Stability in the economy. The CBN has its headquarters in Abuja (F.C.T) with some zonal offices in Lagos, Kaduna, Enugu and Ibadan. It is located in Enugu zone at Opara Avenue.
In this study, the researcher’s mind it to know the impacts of the B25billion re-capitalization by the CBN on the commercial banks in Enugu state off Nigeria, also banks nation-wide.
The researcher wants to know the problems that has caused this new directives also, assume the ways the commercial banks can take-up to meet up with the new directives. The researcher also, wants to know if this new directives by the CBN will help improve the banking and Nigerian economy.
BACKGROUND TO THE STUDY
The central bank of Nigeria was established in 1958 under the CBN act of 1958 which was repealed thereby reenacting the CBN act of 191 (decree No 24).
The CBN owes its existence to the act and it was set up with certain cardinal objectives in mind, e.g (i) to issue legal tender currency in Nigeria.
(ii) to promote monetary stability and a sound financial system in Nigeria etc.
regulations often times take the forms of either rules or directive from the central bank and that is why it has been given the power to:
(a) From time to time, issue directives by circulars requiring each banks to maintain at all times in the form of cash reserves with the bank at its office a sum equal to a prescribed ratio of the bank deposit liabilities, etc section 39 (i).
.b. On the recommendation from the president of the deferral republic, determine what shall be the minimum paid up share capital of each category of banks. Section 9 (1).
It has a management team headed by the governor of the bank, deputy governors and directors of the diverse sectors. The governor is an sever-able to the board of directors for its acts and decisions.
STATEMENT OF THE RESEARCH PROBLEM
In this section, the researcher focused on the impacts of the N25 billion re-capitalization (new directive) by the central bank of Nigeria (CBN) on the commercial banks in Enugu metropolis and nation-wide.
The re-capitalization is viable of yielding some positive reactions or effects on the commercial banks which are as follows:
1. Globalization
2. Merger & Acquisition and consolidation.
3. Increased professional.
4. Stable economy.
According to CBN governor, Prof. Charles Soludo, We affirms that the re-capitalization is a more to strengthen the capital base and introduce multi functional face into the industry. January 4, 2005: This Day News.
A critical examination of these problems after the recapitalization policy has been effected, and gives rise to the following research questions;
- Has recapitalization affected the profit margin of Banks?
- Does recapitalization have any effect on shareholders funds?
- Has it affected the lending rates of banks?
OBJECTIVES OF THE STUDY
The fundamental objectives that prompted the researcher to going into this topic are as follows:
a. To know the reason why the central bank of Nigeria (CBN) came up with such directive (N25 billion re-capitalization).
b. To find out how the commercial banks in Enugu state and nation-wide will raise or meet up with the new directives.
c. To find out the impacts of the new directives on commercial banks.
d. The re-capitalization, will it help Enugu state and the Nigerian economy?
RESEARCH HYPOTHESES
Firstly, hypothesis implies a scientific statement expressing the relationship between two or more variables which is meant to be tested (Anyiwe, et al 2006). It is a tentative answer to a problem (Baridam 2002). Hence, it is a tool for correcting the defined problem of the study.
Therefore, in order to solve this research problem, the following hypothesis shall be tested.
1. Ho: There is no significant relationship between recapitalization and Bank profit.
2. Ho: There is no significant relationship between recapitalization and shareholders funds.
3. Ho: There is no significant relationship between recapitalization and lending rates.
SIGNIFICANCE OF THE STUDY
The significance of this study is to achieve a great success in contributing the little the researcher can, if not a great deal in expressing the impacts of the new directive (N25 billion re-capitalization) by the central bank of Nigeria on the commercial banks which will bring about an immense knowledge and enlightenments with particular reference to the banks in Enugu state.
Hopefully thought, this research work will ultimately broaden the scope of the staffs and management of commercial banks in Enugu state. Also, bring about more noticeable contribution and enhancement to both headquarters and other branches nation-wide to know the benefits and impacts.
Conclusively, though the researcher limited the study to Enugu state and banks, the result of the findings will be of great benevolence to all commercial banks in Nigeria likewise, students conducting similar research work on the same topic or related ones.
SCOPE OF THE STUDY
A sample of sixteen (16) banks that were operating in the banking sector before recapitalization and also met the N25 billion minimum requirements shall be studied.
The period to be studied will be between 2002 to 2009, where need be to state the degree of improvement in performance in preceding years, performances shall be stated only as a point of reference.
Data will be gotten from CBN, NSE and other existing relevant literatures including the internet.
LIMITATIONS OF THE STUDY
Factors that might hinder or contribute to the imperfection of this study are;
- Financial Constraints: Due to the limited financial resources, some inputs that should have contributed towards making this project more perfect may not all be sourced for anytime between the start of the project and the end of the undergraduate programme.
- Time Constraint: The time frame may not also be enough to carryout an extensive research work.
- Inaccuracy of Measurement Tools: Tools used to measure the data might not be very accurate, thus the result might most likely be subject to variation from the actual result.
DEFINITION OF TERMS
Recapitalization: Substantial injection of capital into a company (Unugbro, 2009).
CBN: Central Bank of Nigeria
Reform: To become better by correcting or making improvement.
Accuracy: State of being exact without error.
Effect: A result of an outcome
Merger: Combination of two or more separate firms into a single firm.
Acquisition: Where a company takes over the controlling shareholding interest of another company.
Related Project Materials
EFFICIENCY OF ACCOUNTING SOFTWARES IN THE PREPARATION OF FINANCIAL STATEMENTS
ABSTRACT
The study focuses on assessing the impact of the use of Accounting software in the preparing financial statemen...
INFLUENCE OF COUNSELLING ON THE ACADEMIC ACHIEVEMENT IN MATHS OF JUNIOR SECONDARY SCHOOL STUDENTS IN IBADAN SOUTH WEST LOCAL GOVERNMENT AREA, IBADAN, OYO STATE
Background of the Study
Academic performance of Nigerian junior secondary school students in mathematics has been a sour...
THE USES OF COMMITTEES AND GROUP MEETINGS IN ENHANCING DECISION MAKING IN NIGERIA PUBLIC SERVICE, (A CASE STUDY OF UNIVERSITY BASIC EDUCATION BOARD, AWKA, ANAMBRA STATE)
ABSTRACT
THE MAJOR PURPOSE OF THIS STUDY IS TO EXAMINE THE USES OF COMMITTEES AND GROUP MEETINGS IN ENHANCING DECISION M...
THE ROLE OF INDUSTRY 4.0 TECHNOLOGIES IN TRANSFORMING VOCATIONAL TRAINING
ABSTRACT: This study explores the role of Industry 4.0 technologies in transforming vocatio...
THE ASSESSMENT OF CREDIT ACCESSIBILITY TO SMALL AND MEDIUM SCALE ENTERPRISES (SMES) IN NIGERIA
BACKGROUND OF THE STUDY
The dynamic role of Small and Medium Scale Enterprises (SMEs) as engine of grow...
EFFECT OF EXAMINATION MALPRACTICE ON ACADEMIC PERFORMANCE OF SENIOR SECONDARY SCHOOL STUDENT
BACKGROUND OF THE STUDY
Education is the development of an individual through training, transmission of...
THE EFFECT OF RISK MANAGEMENT ON BUSINESS PERFORMANCE
ABSTRACT
The study examined the effect of risk management on business performance in Staco Insurance Plc in Lagos St...
THE IMPACT OF NEWS COMMENTARIES ON RADIO LISTENERS (A STUDY OF WAZOBIA FM, 8:15 TO 10:30AM PROGRAM)
Background of the study
The history of radio news commentary in Nigeria dated back to the 1930’s...
A CRITIQUE OF THE MECHANISM FOR THE ENFORCEMENT OF INTERNATIONAL COURT OF JUSTICE (ICJ) JUDGEMENT: A CASE STUDY OF CAMEROON vs NIGERIA
ABSTRACT
The border relations between Nigeria and Cameroon remains an issue that gives all concerned a task to ponder. It is however clea...
EFFECT OF MOTHER TONGUE ON STUDENTS ACADEMIC ACHIEVEMENT IN ENGLISH LANGUAGE
Background of the study
It is impossible to place enough emphasis on the significance of learning English as a fou...
