Banking operations in Nigeria between the 1980s and the early 1990s have experienced failures. These failures adversely have affected the mind set of the government, industry, professionals, international community and the Nigerian economy in general. The Banking Sector is no longer at ease while the depositors and stakeholders are apprehensive and unsure of the next line of action. Several notable banks got liquidated, depositors lost a large chunk of their hard-earned savings, investors went underground due to want of capital, businesses stood still, other sectors experienced lull as a result of the chain effect, blue chip ventures retreated, our national currency depreciated drastically, expatriate partakers pulled back vital funds and our ranking in the committee of nations nose-dived, amongst other implications. The jolt in the sector was eventually traced to the sharp practices of some swindlers and money launderers who colluded with bank officials to defraud and destabilize banks and indeed the nation. In the bid towards building and establishing a strong, vibrant and reliable banking operations in Nigeria, the regulatory body, the Central Bank of Nigeria (CBN) in 2006 introduced the recapitalization figure of N25 billion and in 2009 sacked the chief executive officers of ten banks and most recently this year nationalized three banks, while three others signed their Transaction Implementation Agreement, TIA. The spate at which Nigerian banks are faced with one crisis or the other within a short run period leaves many to wonder at the level of risk these banks are exposed to and the implications of these crisis to the Nigerian economy. The resultant effect is that banks should determine measures to take in order to meet the expected capital base combined with good corporate governance, impressive trackrecord of performance and robust risk management systems as required by the Apex Bank.
Ozigbo et al. (Sat,) studied this question.