POST CONSOLIDATION BANK SERVICES AND BANKER /CUSTOMER RELATIONSHIP

CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
    In any developing and developed economy, the role of a well structured financial system cannot be over-emphasized. And for a financial system to mobilize and allocate saving of the country successfully and productively and to facilitate day to day transactions there must be a class of financial institutions that the public views as safe and convenient outlets for its savings. In virtually all countries, the single dominate class of institutions that have emerged to play this crucial role as both the repository of a large fraction of the society’s liquid savings and the entry through which payment are made is the commercial bank. According to Bhole, (1997) a community can not exist without banking services unless it is to remain in a primitive state. It need to secure place in which to store money and things and evolve an efficient method of provision of cash to meet society’s cash transaction requirements safe and convenient payment mechanism which facilities exchange, widens market and extends to degree of specialization and ability to borrow in case of need, and a collection of services in a significant way. The roles and services rendered by the banks in a monetary economy. (Perry 1984).
    In Nigeria, modern banking took root in 1892 when the first commercial bank, African Banking Corporation was established. Put the starting of modern indigenous commercial bank as 1924, when he said “in an attempt to break the monody of foreign banks, efforts was the establishment of the industrial and commercial bank in 1929” (Nwikina 1997). The period up to the year 2004 saw the establishment and collapse of many banks in Nigeria, with the attendant consequences on their services and the future of the bank customer. Banks in Nigeria, up to 2004 were bedeviled by so many ills, including capital in adequacy and bad management that they could not be said to be rendering required services to their customers.
    In an Endeavour to address the ills of the banks and the reposition the banks to enable them meet up their obligation, the Central Bank of Nigeria ordered a recapitalization process, putting bank minimum capital base at N25 billion, this process, which was concluded in Dec., 2005 is popularly referred to as “Bank consolidation” and it saw the emergence of 25 mega banks from the over 86 banks that where in existence before then. With this process concludes to what is the hope of the banks customers with regards to bank services and bank customers relationship? Will the consolidation result to better service to the customers with new array of services rendered more efficiently? These are the issues that this project is set to solve.

STATEMENT OF THE PROBLEM         
    Bank/customers relationship cover mutual benefits on both the bank and the customers. While continue to patronize, the banks makes profit, survives and grows. Pre-consolidation banks in Nigeria could not be said to be meeting up to this required relationship. Hence the incessant rise and collapse of many banks. Now that the banks have been merged in the just concluded consolidation process leaving us with 25 mega banks what effects will this have on banks/customer relationship? Is the post-consolidation banks in a better position to render better and more efficient services to the customers and will all these result in better banking habit to Nigerians? These result are the problem that this project is set out to solve.

OBJECTIVE OF THE STUDY
    The main objectives of this research work are to know the exact impact of consolidation/merger, state of the banks on the bank/customer relationship.
i.    To determine what array of services are now available to the customers of the mega banks
ii.    To determine if the recapitalization would result in change of banking habit of Nigeria.
iii.    To highlight the effect of consolidation in different categories of bank customers.
iv.    To highlight any change in the mode of operation by the existing mega banks
v.    To highlight the impact of consolidation on the efficiency and profitability of the banks.
vi.    To highlight the capitalization on the economy as a whole.

SIGNIFICANCE OF THE STUDY
    This study is significant in many ways:
i.    It discusses the current and typical issue of post-consolidation bank/customers relationship. This would be useful and of interest to both practitioners of banking others.
ii.    It will highlight what array of services is now rendered by banks in the post consolidation.
iii.    This will be useful to prospective customers of the banks including those who are now students.
iv.    The report will being together existing literature on the topic and the result of the survey made.
v.    This will make is a useful material for further research work on the subject.
The report will also be useful as reference for publication on related topics.

RESEARCH QUESTIONS
    In carrying out the research work, the following questions were born in main.
i.    What are banks as business concerns?
ii.    What are the types of banks in Nigeria banking sectors?
iii.    What is the role of banking in the financial system?
iv.    What are the services rendered by the Nigeria banks to its customers?
v.    Were the pre-consolidation Nigeria banks meeting up the expectation of their customers?
vi.    What was the result of the consolidation exercise?
vii.    What is general in post-consolidation bank services and in what ways do they impact on bank/customers relationship.

THE SCOPE OF THE STUDY
     This research work is carried out in River State in particular the investigation will be conducted in a selected bank in Port-Harcourt.

LIMITATION OF THE STUDY

    The inherent limitation of this work came from:
1.    Finance: Because of limited finance, the researcher could not travel much and stay long enough to acquire much needed information.
2.    Time: The research was carried out over as the Academic world was on, thus limited time allocated to the research.
3.    Source of information: As expected many of the respondent could due to unwillingness or ignorant of the fact refuse to turn in their opinions.
In carrying out this research work and arriving at its report, a through and in-depth review of existing related literature was done, and the survey was done at appropriate sections and person in selected bank. All in all, the researcher is convinced that available information was adequate to do justice to the research work.

OPERATIONAL DEFINITION OF TERMS
     In the cause of the research, the following terms was used preparedly, the have the following definitions.
1.    Pre-consolidation are: The period up to Dec., 2005.
2.    Post-consolidation: The bank period from Jan 2006
3.    Consolidation: the recapitalization process where by two or more banks merges 50 as to arrive at the capital base of N25 billion or more.
4.    Bank/customer Relation: the various legal relationship, such as Agency, guarantee, etc. that exist and are recognized by the law between the banks and its customers.
5.    Bank Customer: A person who has personal legal relationship that is enforceable with banks