MISMANAGEMENT IN FINANCIAL INSTITUTION (BANK) EFFECT AND SOLUTION

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF STUDY

A financial institution is an organized body, concerned with the management of money. This is to say that the institution is responsible for the lending and borrowing of money. In other works, it is an institution involved in financial intermediation where money is mobilized and channeled from the public dialing (those who have surplus fund and want to some to those who want to invest in productive activities) some of the institution in Nigeria are “CBN, merchant bank, commercial bank, insurance company, Development banks, stock exchange market etc. Mismanagement is defined by “Land-man English dictionary” as control or deals with private, public or business affairs badly or unskillfully etc. 

The mismanagement is also defined by “oxford English dictionary version” as mismanage, bad improper administration to manary badly or wrongly. Then financial mismanagement according to the above definitions may be improper administration bad or wrong use of money inadequate collateral security of granting loan mis appropriation collateral of money or management of finance unskillfully. The central bank of Nigeria (CBN) is the open bank of a national that serves as the main source of revenue to the government, it equality gives advisory measures to the government. And also help the government extremely in international trade etc. To the public and private individual bank especially the commercial banks provides draftier support to the public and individual affairs. The bank grant loans advances, make payment locally or outside Nigeria. In fact they perform varieties of functions to satisfy the financial needs of all types of customers from small personal account holder to big incorporations and public organization. That is by accepting deposits, safe custody agency services e.t.c. This industries have grown beyond optimistic expectoration over the year or period in the number of bank that expanded in five years.

The variety of bank increased and the growth of the industries resulted to loss of professionalism in services, increasing fraud owing to the craze for material wealth, inflating of contract, God fatherism poor portfolio and other back malsfeasence which has contributed extremely to the constant report of financial mismanagement in a financial institution. The causes of financial mismanagement and misappropriation of public funds are now rampant in these financial institutions. Eve the workers in these institutes had complained bitterly about hanger and starvation. Due to mobility of the manger to pay of their salaries. This has almost the time happened due to misappropriation and improper control and utilization of funds ment for salaries. Reports of riots, unrest or strike of workers which bring a lot on the economy not to function effectively due mismanagement by manager of this financial institution. In this case, mismanagement has resulted to a great effect over many sections of life of the above mentioned. Such as company, individuals, worker and the economy as a whole.

The tendency to embezzle and get rich quick mentality his continued down the line. The serious act of financial institution in Nigeria. Furthmore, mismanagement in financial institutions has make them unable to tackle their problem and obligation like paying of takes to the government, cash reserved ratio workers salaries, giving our loan e.t.c After the last over throvobment of the civilian administration in the country many financial institutions made a lot of staggering discovered to fund misappropriation through inflated contract, bribery and kick backs etc. Since then Nigeria economy has become a sick body up till today. Mismanagement in these financial institution had contributed to a large extent to the various drown-back, which inhabit infrastructure workers salaries. This has also created a lot of imbalance to the government in their revenues generation, Necessary that a research of this kind is carried out for possible solution to the problem of fraud mismanagement in banks. 

In Nigeria today, financial institutions are among the important institutions which are responsible for the countries economic growth without financial institutions like companies, capital market etc. Nigeria and other countries will find it difficult to framsalt business together financial institution like banks perform some duties to the country, state public and individuals. Some financial institution closed up due to the fact that mismanagement closed up too and companies and individual who have account in this bank lost. During the period of the civilian administration over thrownment many financial manage to survive through inflated contract, briddery and kick back etc, which lead the economy of Nigeria back ward, in fact financial analysts put public fund to as been misused and equaling smuggled out of the country a several billion of Naria. Finally, various officers mostly the managers and cashiers of those institutions are accused of the abnormal. The researchers went in deep to finding out the true situation. Manager contributes a majority of the respondent use.