THE ROLE OF NIGERIA DEPOSIT INSURANCE CORPORATION IN DISTRESSED BANKS IN NIGERIA. A RESEARCH PROJECT MATERIAL ON  BANKING AND FINANCE

ABSTRACT

The project has attempted to take an overview of the role of the Nigeria deposit insurance corporation in distressed banks in Nigeria.

In chapter it focus attention of the major problem some banks facing. In literature review it focusers the control of distress in bank.

The research design it helps the researcher to know how he will investigate the research. In findings the project indicates that the government to protect depositors, particularly the small ones against a backdrop of bank failures, conclusion government should expedite approval process with respect to the adoption of some failure resolution option and provide necessary fund for effective complementing of the failed banks.

CHAPTER ONE

1.0              INTRODUCTION

As part of the reform measures taken to strengthen the supervisory all over the banking sector, the Nigeria deposit insurance corporation (NDIC) was established in 1985 by decree No 22 in order to promote public confidence in Nigeria banks. But in addition to this, there was also the long-term need to create and sustain an enabling environment that will engender safe and sound banking practices by protecting the banking system against destructive runs, protecting bank deposits and ensuring fair play amongst the competing banks. These cardinal consider actions were rain formed by the lessons of history of bank features in Nigeria, the experience of other countries where deposit insurances scheme are being operated and there alive of the prevailing distressed financial condition of the banks in particular and other  financial intermediaries in the financial sector in general.

In Nigeria today, hardly can any year pass by without one hearing of one kind of distress or the other in the banking sector. The number of banks, today, classified as problem banks are on the increase and have continued to be of serious concern to depositors, government and regulatory authorities. According to NDIC reports by the end of 1991, 8 banks were officially classified as distressed, the number rose to 15 in 1992. as at December 1993 27 banks were classified as distressed, the number rose to 47 in 1994, 63 in 1995 and 89 in 1996. However the figure dropped after the establishment of deposit insurance scheme to 34 banks in liquidation as at December 2000. deposit insurance is a financial guarantee scheme, which ensures that bank depositors do not lose al their deposits in the event of bank failures.

THE ROLE OF NIGERIA DEPOSIT INSURANCE CORPORATION IN DISTRESSED BANKS IN NIGERIA. A RESEARCH PROJECT MATERIAL ON  BANKING AND FINANCE