TABLE
OF CONTENTS
Title
page i
Certification
ii
Dedication
iii
Acknowledgement
iv
Table
of content v
CHAPTER
ONE
1.0 Introduction
1.1 Statement
of research problem
1.2 Objective
of the study
1.3 Limitation
of the study.
1.4 Research
methodology
1.5 Significance
of the study
1.6 Definition
of the terms.
1.7 Plan
of study
CHAPTER
TWO
2.0 Literature review
2.1 Lending as a function of money
deposit bank
2.2 Lending
procedure in union bank.
2.3 Classification
of account is union bank.
2.4 Year 2011
union bank analysis of loan and advance by performance.
2.5 Prudential
guideliness.
2.6 Security
for bank lending
2.7 Lending
and credit policies money deposit bank
2.8 Procedure
for bank lending
CHAPTER
THREE
3.0 Research
methodology
3.1 Source
of data
3.2 Population
of size of the study
3.3 Limitation
of methodology
CHAPTER
FOUR
4.0 Data presentation,
data analysis and interpetation of results.
4.1 Data
presentation
4.2 Data
analysis.
4.3 Interpretation
of resuls.
CHAPTER
FIVE
5.0 Summary,
Conclusion and Recommendation
5.1 Summary
5.2 Conclusion
5.3 Recommendation
References
CHAPTER
ONE
INTRODUCTION
The
Banking Sector is part of the Nigerian Financial system refers to the totally
of the regulatory and participating institutions, including financial markets
and instruments involved in the process of financial intimidation. Including
financial markets and instruments involved in the process of financial
intemidatin. The banking industry in Nigeria is the Bedrock of the economy. The
banks and other financial institution Act no. 25 of 1991, define “Bank” as one
licensed under the act and banking business as the business of nearing deposits
on current saving or other similar Account and paying or collecting cheque
(Section 62 BOFIA)
From
these definition, banks act only as intermediation agents by mobilizing
financial resources from the surplus unit in an economy and channeling the same
to the deficit unit for economic development. The banking institution do not
own those resources, but rather, in accordance with the agency hypothesis.
These institution act the risk manage of the funds. With regard to the
requirement for protection of the right and interest of their innumerable
depositors, establishment for economic development, bank are expected to
ethnically pursue the integrity, impartiality, reliability, transparency and
social responsibility (cause 1999, Dogarawa 2004)
The
lending process is relatively straight forward service of activities involving
two principal parties whose association ranges from the initial loan request of
the successful or unsuccessful repayment of the Loan. Most students of banking
and accounting would agree that process is an independent but the exact
dependencies are rarely articulated in a rigorous manner. One of the purpose of
this is to investigate association between at least two important aspect of the
lending process namely; The credit evaluation stage and the sequence of events.
Through
storage and the sequence of evens deposit banking interspread other parts of
the world and with time they became organized those Gold Smiths issued
transferable receipt on the Security of Gold deposited by customer and hence
improve the way for the development of current account bill discounting, and
loan facilities.
The
gold smith realized that only small qualities of the deposited gold and silver
were actually demanded for. This led them into lending to other needy
customers. In the contemporary operation at banking sector, small, medium large
scale industries were developed and perhaps controlled by banking through
lending.
Banks
play a significant role in mobilizing savings to fuel investment and growth.
Apart from their role in financial intermediation, banks have been shown to
contribute to general economic stability. This integral link has been most
evident in the Nigerian Financial crisis where the economy was adversely affected
when banks were left weak and vulnerable to external shocks. At the centre of
Nigeria’s economy has been an evolving banking system. That has been in
existence prior to country/s independence from great Britain in October 1960,
Nwankwo (1975) holds that formal banking began in Nigeria in 1982.
A typical credit policy
of a bank should have he board of Director as the Apex of approving authority
of loans. Limits are usually delegated downward from the board of directors to
loan committee and other.
Officers in the credit
or advances development in the head of the down to area Managers and to branch
mangers. Their limits are delegated in writing t ensure adheres to leding
limits, central bank Examiners and external auditors are normally involved in monitoring
loan granted by bank officials.
In
the last decade, these has been tremendous in number of corporate failure
particular in the financial sector in the century the failed bank “Tribunal
report in 1997” stated the reason for money deposit banks failure as follows:
i. Customers
inability to make repayment on the loan or credit facilities collected from
their banks.
ii. The
canon of lending an lending policies.
1.1 STATEMENT OF THE RESEARCH PROBLEM
Not only organizational
control and management of such bank in poor control light, also determine the
level of confidence the public in operation of the banking industry as
effective channel of lending funds.
There
was mass falsification of records to deceive the regulators and the public
Sanusi (2013) report further that a lot of the supposedly raised by the so
called “mega banks” was fake Capital financed from depositor fund.
For example, 30 percent of the share capital
of some banks was found to have been purchased with customers depositors. A bank also reported used depositors fund to
purchase about 80 percent of it’s fund public offer (IPO). It paid #25 per
share with the shares were trading at on the Nigeria stock exchange and those
shares later collapsed to under #3.00. Therefore the following amongst others
are related problems to this research work, there is no proper lending
procedure for bank lending the various procedure for banking adhere. To
management, the performance of bank lending can be overview in money deposit
banks.
Effort
will be made in this research work to examine the various procedure involved in
the granting of credit facility to worth of customer Bank so far
1.2 OBJECTIVES OF THE STUDY
This
research work aim at considering the various lending procedure which bankers
and management should bear in min before credit facilities are been considered
for prospective customer, Also to measure and overview the performance at bank
lending in relation to the altitude of the customers. To estimate role and
procedure of bank to the growth of the economy.
This
Study was set to:
1. Asses
the difficulties that money deposit banks such in the process and in the
implication of improper lending.
2. Determine
the implication of improper lending procedure as it affect the economy of the
banks.
3. Proper
ways at ensuring more efficient lending policies in money deposit banks.
4. Examine
the various procedures put in place by management of money deposit banks
interns of repayment altitude of borrowers.
1.3 LIMITATION OF STUDY
This research work not
be complete without mentioning some of the limiting factors of this study that
has been embarked on which include the followings:
i. Time constraints
to make adequate findings.
ii. inadequate
of fund in getting extensive data.
iii. The
writing of the project is within the last academic period academic work and
providing for relevant data in different places.
iv. Relevant
altitude of institution to reveal and release information necessary of the
study.
v. Finally,
financial inadequacy is one of the major problems encounter doing the course of
gathering data and information.
1.4. RESEARCH METHODLOGY
The
research methodology listed the problems or phenomenon being investigated under
this study. The following research methodology are relevant.
i. What
improvement would procedure to the lending procedure?
ii. is
there no proper lending procedure in money deposit banks.
iii. Does
collateral securities constitute a major requirement for granting of credit
facilities?
iv. Does
management engage in proper are given? At customer project before credit are
given?
v. How
would you assess application for loan, procedure and disbursement?
1.5 SIGNIFICANCE OF THE STUDY
This research work will
throw more light on the lending procedure and also examiner the ways in which
there can be proper monitoring so as to avoid bad lending in money deposit
banks. This study will also be designed to be of immense benefit to all leads
of management in the banking industry especially the credit recovery department
of most banks who deal with the responsibility of giving credit facilities and
also making assessing the lending procedure of money deposit bank and the mode
of repayment considering a the relationship between customer and the bank and
also the past record of money deposit banks operations.
It will also serve as a
guide to bank customer who will wish to seek for credit facilities from money
deposit banks; in a way that customer will know the resource involved and the
types of collateral security for such credit facilities. It may also be useful
to professionals’ bodies in their report about the performance of Money deposit
banks in the past few years.
Finally, it will also
serve as a useful piece of information for both accounting a finance studying
in higher institutions and to people who want to know how best the banking
sector has contributed to the economy.
1.6 DEFINITION OF THE TERMS
INTERMEDIATE:-
The process at mobilizing fund from the surplus unit to the deficit Unit by
money deposit bank(okigbo F.N.C Nigeria’s financial system structure and growth,
Longman group (1979).
NON-PERFORMANCE
EXPOSURE: This otherwise known as no property articulate
loan and this include sub-standard loan, doubt loan and bad loan (money banking
and finance they and practice international education book and publisher,
Owerri Nzotta S.M 1999).
PLEDGE:-
This is delivery a goods or document to title at goods to the lenders as security
for a debt (Mather I.C 1972) securities acceptance to the lending bankers,
water law and son publisher.
MORTGAGE:-
This can be defined as a conveyances of legal or equable invest in properties
by the borrowers or third party known as mortgage to the under described as the
mortgage as security for the payment of debt (Okories Uche 2011), practice of
bank and credit administration.
CRITICIZED
LOAN:- Loan that are performing was not followed it’s own
policy or failed to get full document from the borrower (Rose P.1996) money
deposit bank management(Bank lending policies and procedure) time mirror higher
education group in U.S.A page3, 64-67
DISTRESS:-
A situation where bank is unable to honor the financial obligation as at when
due (oloyede .B 1999) “Principal of Money and banking” for the right
educational publisher.
REVOLVING
FACILITIES:- These are facilities with produce or
stage repayment term but with specific upper limit e..g overdraft and other
revolving credit that are renewable periodically (Odozi V.A 1997) “ The future
of Nigeria financial industry published university Ibadan).
CHARACTER:-
This has to do with the reputation or integrity of a person or Company a honest
person or Organization (Sayemah R.K. 2000) it practice of banking F & S
publisher limited Lagos.
BANK:
It is an organization that provides various financial services to its customer.
INFORMATION:
This is that human responsibility to data through the lending procedure at the
bank their customer by means of known invention used in their representation.
1.7 PLAN OF THE STUDY
The study or research
is divided into five chapters. Chapter one s divided into introduction,
objective of the study, statement of research, problems, limitation of the
study, research methodology, significance of the study, definition of the term
and plan of the study.
Chapter two divided
into Literature review, lending procedure in Union Bank, Classification of
Account in Union bank, year 2011 union bank analysis of loan and advance by
performance, prudential guidelines, security for bank lending, lending and
Credit policies Money Deposit Bank, procedure for bank lending. Chapter three
has research methodology, Source of data, population of size of the study,
limitation of methodology. Chapter four has data presentation, data analysis
and interpretation of results. Chapter five is divided into summary, Conclusion
and recommendations.
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