Banking Inspection And Examination As An Aid To Effective Banking Management

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According to Oxford Dictionary bank inspection Bank inspection – it is an official visit of bank to check that rules and being obeyed and that standard are acceptable.

In the course of the research work the author made a deeply findings which made the research work to contain five chapter.

In chapter one the author started with the background of the study, research question, significance of the study and definition of terms.

In chapter two, the author focus on the literature review, which is divided into theatrical and empirical review.

In chapter three the author went further on the  hypothesis, methodology of the study, source of data and limitation of the study.

In chapter four, the data presentation and analysis.

Finally in chapter five, summaries, recommendation and conclusion



4.1        To what extent are the workers being assured of jobs?

4.2        To what extent are human and non human resources adequate for efficient inspection

4.3        To what extent has the bank provision against computer fraud is being checked

4.4        To what extent will the bank solve the problem of rationalization and retrenchment.




1.0    Introduction

1.1        Background of the study

1.2        Statement of the problem

1.3        The objectives or purpose of the study

1.4        Scope or delimitation of the study

1.5        Research questions

1.6        Significance / rationale of the study\


2.0    Review of literature

Summary of related reviewed literature


3.0    Methodology

3.1        Research design

3.2        Area of study

3.3        Population of the study

3.4        Sample and sampling procedure

3.5        Instrument for data collection

3.6        Validation of the research instrument

3.7        Reliability of the research instrument

3.8        Method of administration of the research instrument

3.9        Method of data analysis


4.0    Data presentation and results

Summary of results/findings


5.0    Discussion, implication, recommendations

5.1        Discussion of results

5.2        Conclusion

5.3        Implication of the result

5.4        Recommendations

5.5        Suggestions for further research

5.6        Limitation of the study






The banking act of 1969 defined banking business as the business of receiving monies from outside resources as deposits, irrespective of the payment of interest and the granting of money loans and cheques, or the purchase and sales of securities for accounts of others or the incurring of the obligation to acquire claims in respect of loans prior to their maturity or the assumption of guarantees and other warranties for others.

In Nigeria, the banking business is being operated by the central bank of Nigeria (CBN) which acts as the apex bank commercial banks, merchant banks and of course the people’s and community bank established by various decrees promulgated by the federal military government.

Commercial banking actuates started in Nigeria in 1892 when the African Banking Corporation commenced its bank work in Lagos.

One of the basic roles of the central bank of Nigeria is the supervision and control of other banks.

One of the basic roles of the Central Bank of Nigeria is the supervision and control of other banks.  In (1982) Hart brought his own view of definition of ank as a person or company carrying on the business of receiving monies and collecting draft for customers subject to the obligation of honouring cheques drawn upon them from time to time by customers to the extend of the amounts available on their current account.

The government through its agency the Central Bank of Nigeria regulates banks.  This is to ensure that they render services to their customers in a manner consistent with safe banking operations and government financial policy.

Due to the need to effectively and efficiently mange depositors funds the task of managing a bank is entrusted with honors, reputable, and hard-working personnel amongst various function of bank management from among alternatives of a course of action.

It is at the core of planning, a plan cannot be said to exist unless a decision has been reached (Kasnts 1984).

The bank personnel management established internal control procedure for the effective discharge of the major functions in order to obtain their corporate objectives. In doings this, special attention must be given to communication problem.  The structure of the bank organization should have a one and the staff structure so that there will be flow of information form the top management and vice versa and also the low level will give advice to the top level who might accept it or not.  This will make people below the top management level to be among of the bank policy and their own responsibilities towards the bank.

With a free flow of information there will be a real basis for effective decision-making.  There is a need to establish a follow up mechanism so that the performance will be maintained to know whether action is going according to plan and policies. If it is not then correction can be made before it is too late. It is in the light of the above factors that the management function of controlling becomes very desirable.

In order words, to ensure that efficiency proper management are maintained the bank management has established the internal control unit or the inspection division.  The inspection itself is an important organ for internal control system.  But our teaching problem is hat despite the establishment of this division there seem to be lapses here and there..

Based on the factors, the research was motivated to examine the extent to which inspectorate unit of banks are contribution to the efficient management of the banks resources with particular reference to United Bank for Africa PLC, Agbani Road, Enugu.


Despite the creation of inspectorate unit in the bank for internal control, it is not clear on the adequacy of human and non-human resources for efficient operations of banking industry.

This is because mangers still grant credits (loans) beyond their power limit without collateral security.

Secondly, cases of bad debts result form loan given to customers that has not been recovered.  Hence the CBN (1990) Prudential guideline has not been obeyed and the effect is reported or minimal profit.

Thirdly, there has been cases of computer fraud deflation and outright removal of physical cash by employees ad out sectors.  This has created imbalance looks and records with obvious effect of huge loses.

Another problem is he extent of frequent rationalization and entrenchment in the banking industry.  This creates job insecurity and workers may tend to indulge in any act for survival in case of eventualities.  All these motivated the research to study the effect of inspection as an aid to effective bank management.


The purpose of this study include the followings

a.           To ascertain the extent to which banking inspection has helped in creating job security to its bank employees.

b.           To examination the number of bad debts resulting from loans given to customers that have not been recovered and provision made for prevention.

c.           To find out the extent to which banking inspection had made provision for job security in the bank with a view to solving problem.

d.           To find out extent of computer fraud and associated of evils in UBA Agbani Road, Enugu, with a view of solving them.

e.           To examine the inspection and examination techniques in the banks. Banking Inspection



a. Does the bank inspection as well s its examination helps in the prevention and detection of fraud.

b. Do bank inspection and examination assist in

ensuring effectiveness in bank management.

c. Do the bank management comply with CBN and

government regulations in granting of loans.

d.  To what extent have bank inspection and

examination help in protection the interest of depositors and creditors of the bank.


These are the research hypothesis for the study;

H0:   There are no possible inspection and examination

in the bank.

Hi: There are possible inspection and examination

in the bank.

H0:   Bank inspection and inspection cannot be

eradicated.Banking Inspection

H2:    Bank inspection and inspection can be eradicated.

H0:   The problem of banking inspection and examination can be solved by Nigeria banks.

H3:    The problem of banking inspection and examination cannot be solved by Nigeria banks.

H0:   There is no impact of efficient in bank inspection and examination

H4:    There is impact of efficient in bank inspection and examination

H0:   Bank inspection and examination assist in ensuring effective in Bank management.

H5:    Bank inspection and examination does not assist in ensuring effective in Bank management.



The significance of banking inspection and examination cannot be over emphasized.

This is because inspection and examination is the only weapon banks can use to rectify and solve the problem of bad debt so as, to the avoid liquidation and thereby affecting the growth and development of the country.

The people that will benefit from this study are banks as it will help workers to observe policies and procedures of the banking ethics to strengthen the job security of staff for efficiency growth and development restructure.

The result of this study or work may help to create the awareness required for the effective and efficient and iting of the banks on a regular basis.  Business organizations and companies will also benefit from this work. Banking Inspection

Moreover, an application o the suggestion made will earn the bank more customers co-operation among staff, trust and confidence on the fellow workers and active the set objective of the banking industry. Banking Inspection


  1. BANK EXAMINATION: Is an on-site investigation of the banks financial conditions, management and policies by representatives (bank examines) of the regulatory agencies.


  1. LOANS: These are income generated by borrowing from private individuals, banks or from foreign countries to finance a project.
  2. Supervisor: A person who comes in a professional contract with the principal staff such that the contact influences the quality of performance and change.
  3. GUARANTEES: This is a written promise made by one person called the guarantor or surely to be collaterally answerable for the debt, default or miscarriage of another person called the principal debtor.
  4. ACCEPTANCE:   This is defined as a draft by one party and acknowledged by a second party.  The drawer who is also the accepter stamps or writes the word “accepted” on the face of the instrument and the place and the date of payment.


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