ABSTRACT

This project work is the challenges facing the Nigeria banking industry. The history of Nigeria banking can be traceable in the early 1820’s with the African banking corporation that was established in Lagos but the corporation did not last as a result of banking habit of the people and consequently ceased operation in 1890.
This project has to do with the problems competitions government interventions, distresses been experienced in the Nigerian banking industry in this present day activities of the banking sector.
This study will attempt to bring on various problems but could be caused and the challenges for customers and also offer solutions on how it could be circumvented. 
The study which is not a result of one research but a contribution of research ideas examines the different measures adopted at different occasions by the central bank of Nigeria to curb the challenges facing the Nigeria a banking industry.
The research methods used are primarily secondary since primary data cannot be effectively used at this state of learning. The researcher made use of both historical and survey research method carrying out this investigations. 
Finally, findings recommendations and conclusions are drawn. Based on the objectives the findings revealed that challenges has to do written competition as far as banking industries in Nigeria are concerned, and that distress can be run into as a result of these challenges in the banking industry. Based on the findings, recommendations are made on how to improve the challenges facing the Nigeria banking industry.

CHAPTER ONE

INTRODUCTION
1.1 HISTORICAL BACKGROUND OF COMMERCIAL BANKING IN NIGERIA 
The historical background of commercial banking in Nigeria can be traceable to early 1820, where the African banking corporation in Lagos established a commercial bank. These corporations did not last due to some limitation encountered as a result of banking habit of the people and consequently leased operation in 1890. However, in the same year. The British bank of West Africa (now know as first bank plc) was also in corporate in London and became operational in Nigeria in 1894. Moreover, this bank enjoyed absolute money of banking business in Nigeria a until 1916 when colonial bank was established. Due to the dynamic and aggressive operation of colonial bank, there was a reduction in the dominance of the BBWA (British banking of West Africa). In 1925 a consortium of three banks (banclays bank Anglo Egyptian bank and national bank of South Africa) took over the assets and liabilities of colonial bank and metamorphosed as banclays bank D.C.O. (dominion, colonial and over seas). Consequently, following the emergence of banclay D.C. O. (now on bank of Nigeria of plc) other expatriate bank of west Africa bank of America chase, mantiattan bank etc. it was observe that the expatriate interest and this led to the establishment of industrial and commercial bank in 1929 with the primary aim of taking care of the special banking interest of Nigeria entrepreneurs. Mean while this bank went into liquidation in 1930.
In additional of the indigenous bank were established which comprise of the Nigeria merchant bank (1931), national banking of Nigeria plc (1933), agbomagbe bank ltd (1945) African continental bank plc (1947). The indigenization decree of 1973, bought to an end of the operation of expatriate banks in Nigeria as the decree empowered the federal government to acquired 40% equity share of all expatriate banks.

1.2 STATEMENT OF STUDY:
The task of this study is to identify the extent of challenges facing the Nigeria banking industry. The effect of these challenges to either the reduction or increasement of response time to her customer needs.
It is a well- known fact that the competition in the new generational banking activities is beginning to give concern to both rich and poor of this economy. Though attempts has been made by both government and private bodies in trying to look into this word “challenges” been faced by trying to meet up with task of answering new generational bank in the services multiple or universal been rendered by banks nowadays. However, though then central bank of Nigeria has also tried her best in look into this problem by the services she renders to these banks such debts. Management functioning, monetary function just to mention but few but still none of this aforementioned function seems to help the situation. Therefore, the so considered dynamic out of all which is the monetary function which has to such monetary control techniques which is as follows:
• Open market operation 
• Bank rate
• Moral suasion
• Liquidity ratio
• Legal reserve ratio
• Special deposits.
But yet this efforts by the CBN (central bank of Nigeria) seen not to help the situation rather distress are increasing in the banks industry, as we earlier commented that our concerns is not really diverted towards bank distress or her survival rather we are considering the challenges faced by banks in Nigeria which distress can be given birth to by this challenges as the case may be.
For instance, just recently in the month of August 2005, it was saw tread in the financial news paper that some banks in Nigeria are about or experiencing distress signals in their activities / business which i consider is as a result of the challenges been faced. Efforts made by most banks in trying to meet the leaking gap involve in some illegal transaction with some wicked or 419 big men in Nigeria. Who have selfish interest and out there to enrich there self by all means no mater what it will cost and care who is been hurt.
1.3 OBJECTIVE OF STUDY
1. To find out the importance of challenges and the effect in the banking industry and sophistication of the business of new generation banking in the country. 
2. It helps in improving banking operation, competitiveness and productivity.
3. It help to identifying the extent to which this challenges been faced by banking in Nigeria has contributed.
4. Therefore, the study to find out an over view of this challenges to the various services being rendered in our bank.
5. It also attempts to find out the various problems that could be experience with this talk “challenges facing Nigeria banking industry.

1.4 RESEARCH QUESTION 
The research question in line with the topic as thus:
1. What is a challenge? 
2. What are the importance of challenging as and the effect in the banking industry?
3. What extent could challenges been faced by bank in Nigeria?
4. What are the studies to find out account on over – view of these challenges to the various services being rendered in banks. ?
5. What are the problems that could be experienced with the challenges facing Nigeria banking industry?
6. Is there really any challenges?

1.5 PURPOSE OF THE STUDY
The purpose of this study is to know the extent of the challenges in connection with our present day banking activities, what it has contributed and bad or adverse effect of it also is to be considered.
Also this purpose of this study is to what challenges are been faced by banking industry in Nigeria today. And now this has affected the banking operation in Nigeria via the establishment of new banks.
Also effect will be made to know if these challenges also affect customer’s transaction power or strength in the banking industry. The effectiveness of these challenges to the economy management of banking the government of Nigeria and private persons just to mention but few.

1.6 SIGNIFICANCE OF THE STUDY
The context of this study would be directed to actual activities of banks today. It would help in laying a foundation for any body who dose not have any experience about commercial banking in Nigeria to have a better understanding of it.
Also to be brought to light is the public misconception about compactions and to correct this misconception of people about the new generation banking activities.
Specially, the issue being studies here are effect of this challenges task be experience by most new generation banks with a view of dominating the negative aspect of this challenges in the bank industry in line with the day to day bank transaction, suggestion for its remedy will advanced.

1.7 SCOPE OF THE STUDY
The study “challenges facing the Nigeria banking industry” is focus at identifying, the extent of the challenges to the various services being rendered by banks in Nigeria and how this challenges have affected out put efficiency.
This study will also attempt to bring out various problems that could be caused via these challenges for customers and offer solutions on how it could be circumvented. The scope to be covered by this work will be all banks in Nigeria. Because of the many services that could be offered by the banks on aspect of their operation, retail banking is considered for the purpose of this study also.
However, the contribution of this topic “challenges facing the Nigeria banking industry” to the establishment of new banks, and their survival in the mist of this challenges.

1.8. LIMITATION OF THE STUDY
Limitations encountered by the research work are financing and uncooperative attitude of respondents.
FINANCE: Book of the economic difficult that Nigeria is posing through, it is very difficult to have every money to achieve ones crucial deserves. A research of this nature quizzes money. A lot of money required for typing, running of questionnaire traveling to places for the project. Un-co-operative attitude of respondent, some respondents were out right hostile and very important to entertain genuine requests. There were also bureaucratic bottlenecks that frustrated those researchers attempt of secretary some official documents.
However, these constraints did not destroy the infrequent of this research.

1.9 DELIMITATION OF THE STUDY
In the course of this study, it would have been very important to look into banks individually but it will cost much more finance, time etc. so we have decided to group the banks under one umbrella.
Also activities coursing distress of bank would have also been look into but due to the limitation experienced in the course of this study will not be able to make it.
1.10 IMPORTANT /BENEFIT OF THE STUDY
Most importantly, this study bring to light the type of challenges been experience by most banks in Nigeria today. Also it makes it possible for some one who dose not have idea about knowledge of it.
In addition, the researcher and any reader of this work to contribute suggestion individual and to know governmental view to topic and that of the private and public.
1.11 RATIONAL JUSTIFICATION OF THE STUDY
This topic challenges facing the Nigeria banking industry is really justified by the activities taking place in the banking industries the day, the issue of new generational banking system, competition of banking. Intervention of government just to mention but few in the banking activities of Nigeria

1.12 ASSUMPTION OF THE STUDY
It is assumed that banking activities in Nigeria is a would of competition and it is place of challenges where every bank wants to meet the current banking activities in the country. It is also assumed that every bank is trying by all possible means to face this challenges and not be left a side or behind in the current trend of banking activities.
1.13 DEFINITION OF TERMS INVOLVED 
In the course of this study, a number of terms will be encountered that are not what might have measuring that are subject discussion.
Attempts will be made to explain what these terms will mean in this study. Because of the in- tech native of the study there are given a number of these terms. They include:
1. Distress 
2. Banking sector
3. Challenges
4. Commercial bank
5. Universal banking.

1) DISTRESS: this can a also be expressed as liquidation bank ruptcy. Hat is where a person, company, government, bank etc.can no more met her financial obligation sand cannot more financial” activities.
2) BANKING SECTOR: This can be express as a the section of our country or this country that are refereed to as those involve in banking services such as acceptance of deposit, payment of cheques on with drawl 
3) CHALLENGES this can be express an influences tiers, oppositions, competition etc. encountered in the banking rend. It also can be refereed to as efficiency and affectivities as the case may be.
4) COMMERCIAL BANK: section of the banks and other commercial institution (BOFD) Decree NO25 of 1991, defined commercial bank as any bank in Nigeria whose business includes the acceptance of deposit, with drawl by cheques. Section 9(2) of the decree also stipulates that a commercial bank must have a minimum paid up share capital of fifty million naira ( N50m)
5) 5. UNIVERSAL BANKING –according to the government of central bank of Nigeria in the exercise of the power contented on him by the provision of section b1 on banks and other financial institution decree (BOFID) 1991 as amended, has approved issuance of the following guidelines to all banks for the implementation of universal banking in Nigeria with effect from January 1, 2000.

REFERENCE:

ANIBUEZE BEN CHUKWUEMEKA (1999)
“Banking practice 
Volume … Africa publishers’ page 21, 22, 23, 24, 243, 32.

CHARLES OBIORA UKEMENAM (2001) “PRACTICE 
OF
BANKING FOR STUDENT & PROFESSIONALS OKEKE PUBLISHERS PAGE 398.