IMPACT OF BANKING SECTOR REFORMS ON NIGERIAN ECONOMY
ABSTRACT
This study set out to investigate in an empirical pattern the impact of banking sector reform on Nigerian economy using a time series data from a period of ten years 2001 to 2010. The ordinary least squared econometric techniques (OLS) is employed in the empirical analysis. the results from the empirical analysis show that generally banking sector reform has played a critical role in Nigerian economic processes over the years. More also, the study show that banking sector reform has significantly positive effect on economic growth in Nigerian banking sector.
    Ultimately, bank reforms aim at ensuring financial deepening which implies the ability to financial institution to effectively mobilizes savings for investments purposes. The growth of domestic savings provides the real structure for the creation of diversified financial claims. It also presupposes active participation of financial institution in financial markets, which in turn entail the supply of quality (financial) instruments and financial service.   
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1    Background   of the Study                
1.2    Statement of the Research Problem            
1.3      Objective of the Study                     
1.4     Hypothesis of the Study            
1.5       Significance of the Study                 
1.6       Scope of the Study                    
1.7        Limitation of the Study            
CHAPTER TWO: LITERATURE REVIEW
2.1     Meaning of Banks                
2.2       Origin of Banks in Nigeria                
2.3      Functions of Bank                
2.4    The Recent Reconsolidation or Recapitalization
of Banks In    Nigeria                    
2.5      Problems Facing Banking Sector in Nigeria     
2.6    Empirical Literature on Banks Recapitalization
and   Economy Growth around The World        
2.7       Theoretical Framework of Bank and the
 Economic Growth                     
CHAPTER THREE: METHODOLOGY OF THE STUDY
3.1    Introduction                        
3.2    Model Specification                
3.3    Estimation Technique                
3.4    Sources of Data                        
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA
4.1    Introductions                    
4.2    Presentation of Results                    
4.3    Analysis of Results                 
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1     Summary of Findings                    
5.2    Recommendations                    
5.3    Conclusion                            
References                             
Appendix                             
CHAPTER ONE
INTRODUCTION
1.1    BACKGROUND   OF THE STUDY
             Reforms have been a regular feature in the Nigeria banking sector. Reforms can be defined as innovation or strategies put in place in order to replace the old ways of doing things. Reforms are usually introduced either in response to development  or challenges such as crisis ,deregulation ,globalization and technology innovation or as proactive measure both to strengthen the banking system  and prevent system facilitate economic development , which provide a platform for sound monetary policies implementation as well as ensure price stability.          
            The Nigerian banking industry had been characterized by financial operation and structural inadequacies for a long time .This has accounted for the different reforms that have taken place so far.
             Areas in which reforms have been carried out were either regulatory or deregulatory or merely innovative in response to the changes in the domestic or global economy such as capital adequacy standards , large number or small banks with few branches which appear to be unavailable , poorly rated , bedeviled with weak regulatory requirement .(CBN 2005). Before banking reforms in Nigeria, many of the banks were declining assets, non-performing insider facilities, large provision for bad debts and fraud due to weak internal control system.  Death of skilled manpower , our dependence on public sector deposit ,denial of credit to the real section of the economy foreign exchange trading (NDIC 2008) with the above lapses. Nigerian banking system was not in a position to meet the national economic growth and development objective.
1.2    STATEMENT OF THE RESEARCH PROBLEM
             Banking industry are recently seeing reforms as an alternative means of recapitalizing .The latest reform that compelled all commercial banks to raise their capital base from  N 2billion to  N 25 billion on or before December 2005 sent some of the banks on their heels considering consolidation.
             The expected problems regarding banking sector reforms are poorly capitalized and unsupervised indigenous banks failed in their infancy (1930-1959). Central Bank of Nigerian (CBN) ensure that only fit and proper person were granted banking license, base on the prescribed minimum paid-up capital (1960-1986).The structural adjustment programme otherwise known as SAP or de-control regime (1986-2004), during this time neo-liberal philosophy of free entry was over stretched and as a result banking licenses were dispensed or distributed to many political authorities on the basis of patronage.
             Beside the aforementioned reforms and puzzled , the study will focus on the recent spanning sanitization and bailout .The impact of this present reforms have  extensively brought sanity to the banking system where banks were compelled to provide for their non-performing credit facility in line with the prudential guidelines . Most of the banks in the country depended upon the public sector deposits which was lowering this capital base. These public funds had not been distributed equally among the banks.
1.3      OBJECTIVE OF THE STUDY
           The objectives of the study are:
1.  To examine the impact of the banking sector reforms on the Nigerian economy overtime.
 2. To establish a reliable and efficient banking sector that will guarantee the safety of the depositor’s money
1.4     HYPOTHESIS OF THE STUDY
            The hypothesis of the study is;
Banking sector reforms have no significant impact on the growth of the Nigerian economy
1.5       SIGNIFICANCE OF THE STUDY
             The study is very significant in the sense that it will provide basic information to bank operators and all stakeholders in the Nigerian Banking Sector of the various development and the impact of the consolidation reforms on the banking sector and hence economic growth of Nigeria.
           It will also be very useful to the government and policy makers in Nigeria as the information contained in the study will better equip them in making appropriate policies and programmes that will improve the banking activities and economic growth and development of Nigeria.
            The study will also be very useful to all researchers , academics, student of finance , economics and management sciences , as it will provide them relevant data that will enable them carryout further studies  in this area or similar ones if they so wish.
1.6       SCOPE OF THE STUDY
              It is a Nigeria specific study design to cover all the banks in Nigeria for a period of ten years (2001-2010).Relevant data shall be sources from the Nigerian stock exchange and the Central Bank of Nigeria (CBN) statistical bulleting.
1.7     LIMITATION OF THE STUDY
          The main limitation of the study is time and accuracy and reliability of data used .However effort will be made to ensure that the results of this study will not be affected and hence reduce to the barest minimum.