IMPACT OF REGULATION AND SUPERVISION ON BANK PERFORMANCE

IMPACT OF REGULATION AND SUPERVISION ON BANK PERFORMANCE

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Finance is the life blood for trade, commerce and industry. Nowadays banking sector act as the backbone of modern banking business development of any country many depends upon the banking system. The term bank is derived from Old Italian word “bance” or from a French word that require it for different purposes and provide easy payment and withdrawal facility to its customers inform of cheques and drafts. The banking sector has been single out for the special protection because of the vital role banks play in the economy.

Banks supervisor do not deal with only the enforcement of roles and regulations, but also judgment concerning the soundness of the assets, It capital adequacy management and also maintain confidence in the banking system. Central bank presented ground for the adoption of monetary management, legal frame work and regulation to improve institutional facilities id for regular supervision and examination of the bank which is one of the mean of maintaining surveillance of banking system.

In 1946, an inquiry under the leadership of the G.D patron was established by the colonial administration to investigate banking practices in Nigeria. Prior to the inquiry, the banking industry was largely uncontrolled. The G.D patron (1948) report, an offshoot of the inquiry became the cornerstone of the first banking legislation in the country. The banking ordinance of 1952. The ordinance was designed to prevent non liable bank from mushrooming and to ensure orderly commercial banking. the banking ordinance triggered a rapid growth in the industry, with growth also come a disappointment by 1958; a few numbers of bank has failed.