Title page i

Certification ii

Dedication iii

Acknowledgment iv

Table of contents v


1.1 Introduction

1.2 Statement of problems

1.3 Significance of study

1.4 Research question

1.5 Purpose of study

1.6 Scope of study

1.7 Limitation of study

1.8 Definition of terms


2.1 Central Banking of Nigeria

2.2 Commercial banking in Nigeria

2.3 Merchant banking in Nigeria

2.4 The role of development banks in Nigeria
2.5 The bank of Industry (BOI)

2.6 Urban development bank of Nigeria limited

2.7 Other banking institution

2.8 The Nigerian enterprises promotion decree 1972-1977

2.9 Monetary policy circulars (Credit guidelines)

2.10 The federal mortgage bank


3.0 Summary, conclusion and recommendation

3.1 Summary

3.2 Conclusion

3.3 Recommendation




The project will review some major economic developments in Nigeria with a view to highlighting the past and present performances of banking institution during these period and the future prospects of banks in the immediate future.

The existence of banking in Nigeria can be traced back to the pre banking system which is branch banking system in 1892.

Nigeria, as a vital and fast growing market in Africa has in recent years acquired an important role in the world economy, Nigeria with a high population is endowed with Nest and largely untapped resources with petroleum being the major foreign exchange earner.

As Nigerian banking system evolves, it increasingly assisted in resources mobilization for economic development prior to the establishment of the central Bank of Nigeria in march 1958, rudimentary banking system tailored to the need of the British Government had been in existence. In Nigeria banking industry, five various types of bank can be identified, the central, commercial, development, savings, and merchant banks. The centre focus of this project is that of the commercial banks, in which intercontinental bank plc is the choose area of study.

The Central Bank of Nigeria was established in 1959 by the Central Bank Act 1958, which charges the bank with the traditional responsibilities of issuing legal tender currency, maintenance of external resources, promotion of monetary stability, promotion of economic development and acting as banker and financial adviser to the federal Government.

The Banking ordinance of 1952 and Banking Act of 1958 and other various amendments laid out the foundation or the operation of commercial banking in Nigeria. The commercial bank rendered such services as saving bills documentation, foreign exchange operation and granting loans.

Following the promulgation of Nigeria Enterprises Promotion Decree, it had be mandatory for all banking institutions to be at least 60-% Nigeria owned.

Commercial Banks in Nigeria designed after the British Banking system, which is branch banking in scope. The first commercial bank in Nigeria was the African banking Corporation established in 1892 and was later taken over by Elder denpoter & Co. in 1813. in 1894, the elder Dempster & Co. was absorbed by the British Bank for west African (BBWA).

Before the Nigeria indigenization decree of 1972 bank ownership structure in Nigeria was as follows:
Expatriate/Foreign Bank Indigenous Banks, mixed ownership Banks, Government owned Banks.

After the Nigeria indigenization Decree Bank ownership structure in Nigeria is as follows:
  1. Banks with majority federal Government ownership e.g first bank of Nigeria plc and United bank for Africa Plc Intercontinental Bank Plc. Bank with majority state Government ownership e.g Gateway Bank, Eko International Bank Plc e.t.c
  2. Bank with majority individual ownership e.g Broad Bank Habib Bank Plc.

Intercontinental Bank plc was founded in 1989, Intercontinental Bank plc is one of corporate Nigeria’s most established branch as part of the reform induced consolidation process in 2005, intercontinental banks executed a merger with three other banks: Equity Bank of Nigeria plc Global bank plc and Gateway Bank plc.

According to its un-audited interim results at august 31 2006 Intercontinental has a capital base in excess of N 61 million ($491m) ranked as Nigeria’s fourth most capitalized Bank. Intercontinental bank is in the market to raise an additional N50billion ($403m) by a way of a combined right issue and public offer or subscription. 4 over subscribed, the bank has announced it is capable of absorbing up to N80billion ($645m) which would take its capital base to N140billiobn ($1bn).

Revenue and profitability of intercontinental according to in term results for the first six months of the bank’s financial year to august 2006, interest income is up close to 150% on the same period in 2005. Profit before tax 100% at N3.2billion ($26m). Intercontinental bank has more than 200 braches nationwide rising to 2890 by the end of February 2007. The bank has begun it continental expansion in Ghana.

Therefore, commercial bank in Nigeria perform various functions such as acceptance of deposit, granting of loans and overdrafts, Bill discounting, provision of safe custody for valuable items, provision of foreign exchange, money transmission provision of bank guarantee in form of bonds.

The statement of problem is talking about the influence of the contribution of banking industry to the development of Nigerian economy.
  1. Does the development of Banking industry has in impact on any credible development in Nigeria.
  2. Does the consolidation on the Banking sector improve the Nigeria economic.
  3. Does the establishment of bank reduce the level of unemployment in Nigeria.

The study is aimed at analyzing the contribution of banking to the development of the Nigeria economy and their relevance effectiveness to financial institution, it will be useful to a lot of individuals and co-operate bodies such as policy maker in the attempt to fashion out dynamic services in developing Nigeria economy. It will also:
  1. Assist bankers economist, analyst and business administrators who are credit managers.
  2. Researcher who may likely want to carry out further study on the contribution of banking to the development of the Nigeria economy.
  3. This research work will also add to the existing knowledge in a globalize village.
  4. The significance of this research work cannot be emphasized because it will look into various way in which the contribution of banking to the development of the Nigeria economy.

  1. Will the development of Banking industry has we an impact on any credible development in Nigeria?
  2. Will the consolidation in the banking sector improve Nigeria economy will the establishment of banks reduce the level of unemployment in Nigeria?

The purpose of this work is to highlight the contribution of banking industry to the development of Nigeria economy with recommendation on how to control and negative effect and improve on existing positive ones.

This project is designed mainly to have a cursive look into the role of Banking and also to asses the effect on consequence of commercial banks in the economy. The research work will also attempt to look at the contribution so far made by the bankers at revamping the economy.

Banking is seen as any other line of business like the industries where goods are produced by the factory workers who are the either consumption or otherwise, so is the banking sector.

This study is limited to finding the way of how the ban king institution will contribute to the development of Nigeria economy and their study shall not go beyond Intercontinental Bank Plc and First Bank of Nigeria plc, out attention will be focus on Intercontinental Bank Plc.

In the course of carrying out a research on this project certain problem were encountered. These include:
  1. Finance: The cost of printing questionnaire and to make copies of this questionnaire and also cost of obtaining other materials for the computation of this project.
  2. Time constraint: The time between the commencement of the project and the date of submission is to short.


Central Bank of Nigeria: This is a sole banking regulatory authority. It is the apex bank whi8ch establishes and manage the Nigeria economy it has a “Governor” as its head.

Banking System: This is a subject that attempts to study the banking system of many countries. It also the ways which banking institution do their job in an economy.

Merchant Bank: These are wholesale banker that accept deposits and make loans to corporate bodies only.

Commercial Banks: They accept deposits and gives loans to both corporate bodies and individuals.

Economic development: This is when the growth and development of a country’s economy as same in increase production and investment, a higher standard of living.

Accounting System: Is a set of redid procedures, equipment that are fined to deal with the events affecting the financial performance and position on the entity.

Bank Acceptance: Bank are expected to accept deposit into saving, current (demand deposit) and fixed deposit account of their corporate and personal customers.

Computer literacy: Computer literacy is when official of a department are exposed to the training and manipulation of computer services top achieve a desired result.

Long –term loans: these are loans granted to customers over a long period of time. It is usually more than one year it altercates payment of a fixed interest whether or not the customer makes profit.

Overdrafts: Simply means customers are allowed to withdrawn more than that they have in their accounts.

Short-terms loans: These are loans given to customers for a minimum period of time say one month, six month or one year and it involves little interest.

Abubakar A. (1999): The role of NIBB and the Future Prospects of Industrial Development in Nigeria CBN Bulleting Silver Jubilee Eidtion Vol 11, pp 24-32.

Ajayi I Tenbag (1992): 50 years indigenous Banking in Nigeria (Fourth Selection, Vol 5. pg 89-101).

Ajibola B.O (1998): Banking for the professional student Dalson Publication Limited, Lagos.

Boyo S.O (1993): Effect of Government Directive on the Banking Industry. Paper Presentation of the annual seminar of the Chartered Institute of Bankers of Nigeria (CIBN).

Central Bank of Nigeria (CBN) (1976): Report of the committee on the Nigerian Financial System.

Nwankwo G.O (1980): The Nigeria Financial Student the Macmillian Press Limited, Lagos.

Ojo D.A & Adewanm B.O (1982) Banking and Finance in Nigerian Graham

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