Banking Inspection And Examination – Aid To Effective Banking Management

Banking Inspection And Examination – Aid To Effective Banking Management

Banking Inspection And Examination – Aid To Effective Banking Management

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.

To place an order for the Complete Project Material, pay N5,000 to

GTBank (Guaranty Trust Bank)
Account Name – Chudi-Oji Chukwuka
Account No – 0044157183

Then text the name of the Project topic, email address and your names to 08060565721.  

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.

The CBN’s objective and goals of banking inspection and examination are:

1. To develop a sound banking system

2. To protect depositors and creditors of the bank.

3. To provide adequate banking services in all part of the country.

4. To promote rapid economic development throughout the country.

The bank examination department of CBN was created by Sec. 20 of the banking act of (1969).

The powers of the banking act include:

1. The appraisal of the management with special attention to competence and general effectiveness

2. Appraisal of the system of operation procedure and control.

3. Assessment of the adequate of capital structure in relation to the size of business.

At the management level of each bank (Commercial, Merchant etc) a system of inspection and control exists to ensure that these guidelines are followed and also to ensure that loans are not indiscriminately issued by managers. The interest of the owners as well as the staff of such banks are also protected by this.

1.2 Statement Of Problem

The problems are:

(a) Lack of fraud prevention and determination in banking institution as a result of poor inspection and examination.

(b) Ineffective banking management caused by essence of bank inspection and examination.

(c) Non compliance by bank manager with CBN and other government regulations on granting loans.

(d) Non protection of the bank depositors and creditors interest.

1.3 The Purpose Of This Study Are:

(a) To determine whether bank inspection and examination has helped in the prevent and detection of fraud.

(b) To determine how bank inspection and examination can be of assistance to effective bank management.

(c) To find out whether bank managers comply with CBN and other government regulations on granting of loans.

(d) To know how bank inspection and examination has helped in protecting the interest of depositors and creditors of the bank.

1.4 Scope Of The Study

The scope of this work is limited to United Bank for African Plc, Agbai Road, Enugu that is second to the larges within the metropoly.

1.5 Research Questions

(a) Does the bank inspection a well as 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 manager comply with CBN and government regulations in granting of loans.

(d) To what extent have bank inspection and examination helped in protecting the interest of depositors and creditors of the bank.

1.6 Significance Of The Study

The researcher wished that through this study the doubts and fears instigated in the minds of the general public as a result of the (insecurity of their money) distresses in banking would be cleared.

This study also will be of benefit to bank inspectors, external auditors, accountants, bank management, bank depositors and creditors and the general public who rely much on inspection reports.

The researcher also helps that the result of this study will restore trust and dignity of the banking system in Nigeria.

2.1 Conception And Purpose Of Supervision
All effect of designated official towards providing leadership in the improvement of service, programmers of in serve education and co-operative group development. The efforts to stimulate co-ordinate, and guide continued growth of worker (Kiths 1960:4).

He further opined that in banking industry, both individually and collectively assistance in the development of a better instruction and clearing and services situation and a means of maintaining existing programmes of instruction as well as improving them.

Hares (1975:8) categorized the supervisory tasks as preliminary operational and development (OPD). Hares (1959:3) Icenezrich (1962:9) Mestier (1972:10) Oliver (1962:9) and Withes (1977:7) described a supervisor as a person who comes in a professional contact with the principal staff such that this contact influence the quality of performance and change. They further agreed that the supervisor through his experience provides and intellectual stimulating forum for the enhancement of conception and skill and a confronting participates with alternatives, strategies or techniques for better professional leadership role.

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Such leadership role has its source of authority from the board delegation, fellow workers special group and government Oliver (1979:8). He further listed out type of supervision as follow:

(a) Democratic supervision

(b) Coversine supervision

(c) Laiser faire supervision

(d) Training and guidance supervision

(e) Inspection.

Wits (1977:14) resonates that the techniques of supervision include the following:

(a) Office obsenation

(b) Visits to offices

(c) Clinical supervision – interaction between the workers/ supervisions during instructional period.

(d) Problem solving

(e) Individual conference

He further opined that for all themes techniques the supervision should be able to understand the few general roles expected of him such as

(i) Leadership function

(ii) Co-ordinating function

(iii) Resources function

(iv) Service function

Leadership function is a democratic method that involves:

(a) Escorting initiatives

(b) Helping in setting goals

(c) Stimulating and releasing talents.

(d) Change agent

(e) Follow up group commitment

Co-ordinating function involves the task of locating and organizing resources and moving them available to those who need them.

Resources function is where the supervisor himself is a research person from whom knowledge is tapped. He is well skilled, trained and experienced and all are placed at the disposal of management.

Service function refers to where the supervisor acquaintance with the result, current experience, professional expertise and skill in human ratio helps in the efficiency of solving problem facing activities and development. He also interprets aims and procedures and resolves official programmes to the public. Master (1972:8) and Olinia (1976:15) affirms that a good supervisor should be courteous gracious friendly emphathic, symbolic, good listener, helper, time and skillful.

They further gave six personality trait for a desired supervisor as:

1. Concept of human worth and dignity

2. Recognition

3. Participation

4. Freedom

5. Communication

1. The concept of human worth and dignity shows that in a democracy, man is as of high value and much a supervision should realize that others can make useful suggestion. This shows that two head are better than one.

2. Recognition of ones worth is the beginning of psychological disposition and in section e.g. a child, seeks for recognition from the parents, poor group etc. hence doing staff meeting recognition of ones worth will provide job satisfaction and which builds status.

3. Participation is democratic support of people to be effectively committee to such organisation. It is through participation that a child ultimately becomes part of the society. Thus, this brings administration comminence with efficiently in banking industries anywhere in the world.

4. Freedom to work, think learn expose, intent to make mistake and correct some most exist if actual services is to occur. This underlines individual growth, development self actualization and leadership. This shows the rules of law and its features must be respected to the base. Having motives of legality, equality and liberty as the necessary freedom.

5. Co-operation is what many people call democratization approach which is what based up in the ideal of human work and dignity.

This is very important in banking industries and it includes symbols, structure postures and attitudes. Ability to communicate effectively is the major determinant of the success of all human and social activities. The purpose of those functions animated is to guard against actrivenary effectiveness without achieving efficiency and vise verse.

Opdi (1993:4) reiterates that the significance of such desired supervisor is to marry effectiveness and efficiently so as to achieve the following:

1. Achievability of balance in effectiveness and efficiently.

2. Ability to win staff participation or capitalize in their services.

3. Promotion of good working relation through the cultivation of desirable temperament.

4. Adopting delegation as a supervisory strategy in which one can be professionally in touch despite the physical remoteness on all seeters of the establishment.

2.2 Organisation And Management Of Supervision In Banking Industry

A supervisor is an overseer and a person responsible for the well being of his staff, puts his man in good heart a captain of his team not a visitor from higher authority.

Parathon (1984:1). He further affirmed that a supervisor is more than a leader. A leader is one who shows the way by going in front “or” together with “other” in an important idea movement or action. The element of going together with is to be preferred to going to in front smile the latter might indicate a header who leaves his colleagues behind. This reducing them to more followers.

Whereas the former implies a starting of ideas and view points especially in an age specialization where the supervisor must have the intellectual humility as necessary diatom in dealing with staff who are experts in their professional areas Coyan (1973:3).

Historical Union Bank Plc in 1917 as Barclays facilities. This is because the tomorrow you planned for yesterday is today. Development task involves arranging for in service education of the staff. Co-ordinating role, evaluating activities and offering consultative.

2.3 Developing Effectiveness In Supervisor

Anikpo (1993:12) admitted that for effective supervisor there must be effective communication. The steps and characteristics of effective communication is as follows:

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1. Keep it simple.

2. Write down as much as possible.

3. Report keep terms often.

4. Explain why decisions are made.

5. See files.

Harris (1975:4) affirmed that motivation is supervisory efficiency and gave guidelines for effective supervision in hospitality or banking industries as follows:

(a) Recognize and base record on performance naturally high performance can bring financial rewards for some workers but quire word of praise or thanks, an extra half day off if related to performance can help to encourage and motivate.

(b) Practice loyalty towards subordinates. Most of the supervisor grumble about loyalty of workers but never come to see the mistake of a subordinate as his own. Reporting to a higher authority is never the best instead of caring the can and standing loyalty from them.

(c) Be employed conferred not task conferred. Human relations are not a question of being nice to people rather being interested in them. Hence, speaking to people or your staff everyday with fraud lines, politeness as well as addressing each by name best like by him.

According to Harris (1975) an effective supervision is one who:

1. Gives subordinates feedback on their performance.

2. Looks after the needs and welfare of his group

3. Disciplines by persuasion rather than punishment.

4. Allows participation group discuss and decision.

They further stressed that the best supervisor is the one that:

 Stay close to customers.

 Stick to the knitting is to stay with what they know best.

 Operate a simple forum of inlaritice to allow communication.

 Are all hands on value given i.e. keep close to the employees and encourage story. Corporate identity with forum leadership

 Should act instead of over-analyses options.

 Achieve productivity through people. Taking these eight criteria by Peter Waterman (1929:12) narrated that if Passel and Akulins found seven features the (775) prevalent in successful, Japanese companies as:

1. Strategies (clise to the customers)

2. System (hand and value driven)

3. Structure (Autonomy entrepreneurship)

4. Skills (bias for action)

2.4 Frauds Amount To Inspection

(a) Here we all know that this fraud can cause a hearing problem. In the banking industry we call it liquidation. This can arise through computer deflation or fault. The worker will be reading a different amount all together from what the computer will be reading. An inexperienced staff using the computer he does not know how to operate by giving huge amount of money in place of small amount.

(b) Lack of inspection from a client due to inability to perform their duty. Most of them will be saying that whether they work or not they must be paid their salary

(c) Employment of inexperience workers that cannot make use of the machines in bank especially WASC/GEC holder.

2.5 Summary Of Related Literature Review

Dynamic supervision in banking industry demands conscientious effort discontinues existing practices that are less desirable change. This strategy in banking creates competence profit, which works on the symmetrical best for the combined realization of objectives

Despite the fact that most of the supervisors and managers are not excellent, some are considered competent or adequate at best there is need for every profession to expose his work to the professional seriating of his professional equal or colleagues so that their criteria can stimulated him to improve performance.

It is disheartening that despite the increase in banking industry, which supervision in the industry has made significantly mark.

This is because there are new framed here and they are the extent to which if creates embarrassment and is viewed as a betrayal of hope unless something is done in it.
INSPECTION: In this aspect, it means to examine carefully visit officially to se that rules are esliged that is to know that work is done properly.

As a result from my respondents which are shown in this chapter.

In table 4.1 there were 40 respondents and all of them agreed that the workers are being assured of job in UBA Plc Enugu. Since workers are the root of achievement of any banking institute.

Table 4.2 believes that human and none human resolves are adequate for efficient banking inspection. Since human and none human resources play a very remarkable role in ensuring efficiency of inspection.

Moreso, highlight shows in 4.3 that UBA Plc bank’s provision against computer fraud is regularly checked.

Then according to the information from table 4.4, it can be seen that 30 respondents agreed to a great extent that the bank will solve the problem of rationalization and retrenchments while 10 respondents disagree.

In general, it can be seen that banking inspection needs more attention to enable it to detect frauds.



This chapter of the research will present the summary of the results as follows.

All the staff in the UBA Plc, Enugu answered affirmatively to the questions. Vast majority affirmed that bad debt occurred always, most of the staff agreed that human and none human resources adequate for efficient inspection. Majority of the staff of UBA Plc, said they have not experienced, computer fraud, majority of the staff claimed, that UBA Plc, Enugu has experienced rationalization ad retrenchment.

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Equally staff of UBA Plc, Enugu agreed in system of bank provision against Computer fraud.

It reveals that the sample of respondent agreed that outright unauthorized remove of physical cash by employees and customers are positive on the issue.

The majority of the staff of UBA Plc, Enugu agreed that banking inspection help in creating job security to bank employers.


This study is necessitated by the society demands on the banking industries. This is because it appears the security is loosing confidence in the financial institutions, based on 1994 experiences.

However suspicion in banking demands conscientious efforts to discontinue existing practices that are used cherisable for cherisable change.

This strategy competence profile, which was on synergic best for the combined realization of objective excellent, some are considered competent or adequate best. This is need for every professional to expose the work of the professional insecurity of the equals so that criticisms can stimulate improvement. This is to restore the last hope on the banking industry by an average Nigeria.


Irregular inspection of banking institutions yields a negative result to the output of these banking organizations. Such negative results include irregularities of the workers, non-uniformity and negligence of duties in the entire management.

Secondly, it has been discovered that some banking institute have the trends of banking inspection in their principles but do not put them in practice while doing their jobs. Furthermore, due to inconsistency of this relevant banking inspection and supervision, some heads of the firms have assigned their jobs to subordinates.


With regard on the summary of findings and discussion with relevant conclusion drawn from major findings the following brief recommendation are made banking industries should ensure the following. If inspection is to make sense and significant contribution to the growth.

Motivation of workers by giving recognition and basing rewards on performance. And loyalty must be practiced towards subordinates. This is because if you demand loyalty you must show it first so that they could be carried along and stood by to check all checkable without complaints. Staff and welfare should be adequately being assured. In service training should be given to staff on regular basis to get abreast with demand of the time, seminars, staff meetings, individual conference demonstrations service provision of officer bulletined and visit to staff aerates knowledge make people closer.


Inspite of the existence of banking Act Bank and other financial institutions decree, and other government guidelines. Bank fraud is still high.

While some banks are not meeting up with government etc.

For this and other reason, the following topics are suggested for further studies.

Solutions to banking malpractice. Falsification and alteration of records in bank. Improving to bank lending policies in Nigerian. Inspection and examination efficiently in modern banking in Nigeria.


The researcher is not a full time student. The attitude of the management of the bank in allowing the researcher to carry out the research work. Restoration on some vital information considered to be “secret” by the management. The fear of being implicated by some of the respondents.

The inability of visit to CBN and NDIC offices (as a result of academic and social engagement) financial constraints, the duration of the submission of the project.


Instruction: Please tick good where appropriate.

1. Sexes male [ ] female [ ]

2. Educational qualification

(a) Primary School Leaving Certificate [ ]

(b) SSCE / GCE / OL [ ]

(c) OND or Equivalent [ ]

(d) HND, B.SC etc [ ]

(e) Professional qualification eg, ACA, FCA, etc [ ]

3. What is your job experience

(a) 10 – 15 years [ ]

(b) 16 – 25 years [ ]

(c) 26 – 30 years [ ]

(d) On contact [ ]

4. Present department

(a) Accounts or finance [ ]

(b) Distribution [ ]

(c) Marketing [ ]

(d) Personnel and administration [ ]

(e) Mechanical / Civil [ ]

(f) Generation [ ]

5. To what extent are the workers being assured of jobs?

(a) To great extent [ ]

(b) To an extent [ ]

(c) None of the above [ ]

6. To what extent are human and none human resources adequate for efficient inspection?

(a) To great extent [ ]

(b) To an extent [ ]

(c) None of the above [ ]

7. To what extent has the bank provision against computer fraud is being checked?

(a) To great extent [ ]

(b) To an extent [ ]

(c) None of the above [ ]

8. To what extent will the bank sole of the problem of rationalization and retrenchment?

(a) To great extent [ ]

(b) To an extent [ ]

(c) None of the above [ ]

Banking Inspection And Examination – Aid To Effective Banking Management

To place an order for the Complete Project Material, pay N5,000 to

GTBank (Guaranty Trust Bank)
Account Name – Chudi-Oji Chukwuka
Account No – 0044157183

Then text the name of the Project topic, email address and your names to 08060565721.  

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