CHAPTER ONE
1.0 INTRODUCTION
A commercial bank in a country can be described as
the fuel tank which supplies oil that lubricates trade and industry in order to
get the wheel of economic activities in motion. Commercial banks are no larger
uniquely described in terms of being a financial intermediary offering demand
deposit and commercial lending service. Rather, it is a financial intermediary
that provides financial service in an evolving industry. The financial service
is affected by both the organization and the structure of the bank. The quality
of financial services rendered by the bank has great effect to some extent in
determining the degree of patronage by the public.
Competition among banks due to the rapid growth in
the number of financial institutions is so high that a wide range of
institution via with one another in affricating customers and offering the
customers a verity of financial services. With the foregoing the study will
endeavor to examine to what extent the organizational structure of the FIRST BANK
PLC, militate against its provision of efficient service to its customers.
1.1 BACKGROUND
OF THE STUDY
Commercial banking in Nigeria dates back to the
early colonial period. The decline in barter system of trade and the rise in financial
transaction of the colonial government required an institution in the form of a
commercial bank for safety and transmission of funds. It was for this purpose
that African banking corporation based in South Africa was invited in 1892 to
open a branch office in Lagos. The African banking corporation was therefore
the first modern commercial bank to open a branch office in Lagos in that year.
In the year 1894 its operation were taken over by
the bank of British West Africa. In 1899, the bank in Nigeria was established
by the royal Niger company. In the year 1912, the bank of British West African
absorbed the bank of Nigeria and exercised monopoly over Barclays bank started
operation in Nigeria, other colonial, banks joined in the later year.
The indigenization exercise abolished the existence
of the expatriate banks in Nigeria. Their existence was terminated. For some of
the following reason:
1.
The integration of the monetary and security market for liquid assets and investment of excess reserve and in effect
retardation of the emergence of local money and capital markets.
2.
The banks by virtue of their interlocking relationship with important transnational
banks are assured of credit Accommodation.
3.
The operations of the banks failed to take into consideration the credit needs
of
Nigeria.
The discrimination suffered by Nigeria spurred them to attempt to found their
own bank. In year 1973 the banking industry was indigenized by the federal
government acquiring 40% of the equity of foreign banks in Nigeria.
These indigenous commercial banks in Nigeria
represent the effort of Nigeria businessmen to establish their own banks since
the expatriate banks have not been particularity interested in giving them
assistance they own business.
The first effort in this direction was the
establishment of the industrial and commercial bank in 1929 which failed in
1930. The Nigeria mercantile bank was formed in 1931 but it went into voluntary
liquidation in 1936.
Successful indigenous banking effort in Nigeria
began with the establishment of the national bank of Nigeria in 1933. The next
successful Indigenous bank the African continental bank was established in the
year 1957. The pan Nigeria bank was established in the year 1951. Currently
there are over 60 Indigenous commercial banks in Nigeria with numerous branches
spread throughout the country.
In fact, the period 1947 to 1952 witnessed the
experience of bank failures in Nigeria. It has been shown from available
records that these banks also collapsed with the same rapidity with which they
were established.
By 1954 twenty one(21)out of the twenty five (25)
indigenous banks failed due to inadequate capitalization over trading, lack of
technically skilled personnel and of course poor management. The failures were
an affairs for banks officials, depositor and government.
The forty three commercial banks which responded to
our survey reported having a total of 397 board members for an average of about
9 members per a board. No bank has more
than 15 members and no bank has more than 15 members on its board.
There appeared to b no relationship between bank
size and board size or size. For example, the biggest three banks and fifteen
and thirteen board members.
Similarly, some state owned banks had between five
and six board members just as state owned banks had between five and six board
members.
The survey also revealed that out of the 397 board
members, only 154 of them had equity interest in the banks they were directing.
In other word, 234 board members were not shareholders
in the bank they directed. As would be expected, the directors without equity
interest were primary representing state and federal government interests in
the banks. The directors were government appointees.
The indigenous bank as a group have contributed
significantly to the economic development operate mostly in the indigenous
business sector and have extended credit to small and large scale indigenous
entrepreneur .
Secondly, they have contributed to the development
or potential depositor and banking habit W.A. (1970) in his development process
states that development occurs in all directions.
Simultaneously, growth and development run into
bottlenecks sectors.
Thirdly
the aggressive mobilization of the domestic savings though direct contact with the
people and the use of mortem have contributed development. Introduced by Shaw and
MacKinnon in (1973) as the concept of “financial deepening” and also providing employment
opportunities for Nigeria in responsible position in banking Industry.
The Structure of the Nigeria Commercial Banks can be
Discussed As:
Branch
banking, the commercial banks in Nigeria operate the branch banking structure.
This is a structure arrangement where by very few
large banks with net work of branch office dominate the economy. This branch
banking takes instructions from their head offices (not autonomous).
Indigenous banks this is a banking structure in
which the ownership of banks invested completely on the indigenes of the
country. These banks operate mainly in their state of origin some of them have
their head office at their state origin.
They serve mainly indigenous interest. Mixed banks,
these are banks that are jointly owned by Nigerians and foreigners. The maximum
ownership interest of the foreigners in mixed banks is 40%. The indigenous owners
have a 60% minimum ownership interest in the mixed banks. (Orjih .J.1996).
1.2 STATEMENT
OF PROBLEM
Banking is a service industry and such a bank should
have it as a duty to provide services to its customers.
In other to remain in good business, the banks
services must be tailored to the public needs and rendered efficiently. All
efforts should be made to eliminate or reduce delays .speed and accuracy should
be the watch-word. A bank which produces and renders service efficiently would
embraces the patronage of the public and enhance the economic growth. Infect
the rendering of efficient service and profitability and so on. All these
obligations of a bank, its customers are very important in any country. The
reverse however is the case in being made by the customers of first women, the asset
that there are inadequate service and frustrating delay in first bank plc they normally
complain that “time is money” and they believe that any time wasted or lost in order
to with draw or deposit money is a lot to their business.
Civil servants often complain that a great number of
hour is lost when they level their office for hour just either to deposit or
withdraw money from the bank.
All these problems will affect our economy, if not amended
and also the gross national product will be adversely affected.
1.3 OBJECTIVE
OF THE STUDY
The objectives of this study are stated as follow:
a. To find out ways of
improving the quality and the efficiency of those financial service products, rendered
to the customers of first bank plc.
b. To investigate some
ways of eliminating or ridiculing delay by first bank (nig) plc to its
customers.
c. To examine if the
service rendered and produce by first bank (nig) plc will embrace the patronage
of the public and enhance the economic growth of the country.
d. To examine the
impact of organizational structure of first bank plc from 1999 – 2004 on an
efficient customer services.
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