A Bank economic purpose is to act as a financial intermediate it facilities the process of channeling savings into investments and one of the avenue of realizing this objective is by lending effectively.

        It was recommended amongst others that state owned commercial banks should be effectiveness Banks should use the services of external consultants to manager collect the debts on account classified as doubt fill and prevent the diversion of funds by some borrower, the banks should try as much as possible to deal directly with contractors or supplies of the borrowers as the case may be.

      All business regrettably experience bad debts, but bankers whose stock in trade is money view debt incidence with dread. Never the less, the occurrence of bad and doubt fill debts can be regarded as a difficult occupational associated with business. But for bank, it has for long been contended that, this dreaded and unavoidable disaster which should be kept with in reasonably margin of the total lending portfolio of the bank.