PRUDENTIAL GUIDELINES AND MANAGEMENT OF DEBT IN NIGERIAN BANKS
This research examines Prudential Guidelines and Management of Debts in Nigerian Banks. In carrying out this study for questionnaire were used to collect data from respondents. The random sampling method was adopted in selecting the study participants. The study revealed that commercial banks use collateral securities as a necessity for granting credit facilities. This study also revealed that problems such as the adoption of these prudential guidelines have significance on the management of dept in commercial banks. The study further revealed that the above mentioned problems can be mitigated by critically and specifically examining ways debts are revealed in Nigeria commercial banks. The study recommends among others that it necessary for the lending officer of the bank to be firm and act in accordance by laid down rules before granting credit facilities to customers, securities should be perfected.
1.1 Background to the Study
The banking system and other financial institutions are normally approached by some groups of individual in order to acquire necessary capital with which to execute their business plans. One of the objectives of commercial banks is the generation of profit, and this is realized through the bank’s ability to accept new deposit, while the old ones are retained and put into profitable use. Banks play important role in the economic life of a country particularly developing country like Nigeria. This they do through the provision of banking services. As agent of development, they provide loan which could either be short or long term to help these individuals execute their business plans, this explains why credit guideline contained in government monetary circular stipulate the aggregate ceiling on credit creation as well as sectoral allocation. Banks and other financial institutions prepare financial statement to suit their particular /peculiar interest.
The prudential guidelines regulates how interest on loan and advances and other risk assets should be recognized and disclosed in the financial statement and how loses therefore, should be calculated (Remi, 2004).