Bank Failure: Causes and Consequences

Research concerns “Bank failure” causes and consequences” Bank failure in our banking industry has become a peculiar household word in this country, which cannot be overemphasized. It is a re-current issue, which caused to captivate many individuals and banks, which has caused untold hardship to collective individuals, individual, stakeholders. This ugly scene has paved way for losses of staggering sum of money and investment by some banks.

As a matter of facts, Banks distress has significantly contributed to the bank failure of some banks. This project work examined the trend that lead to the Bank failure and moreover, some Bank staff have lost their jobs and single benefits. The confidence the public has on the bank is speedily warning down and many bank customers comment bitterly about this fact or issue.

The project surveyed the literature in the causes and consequences of bank failure, impact of bank failure, the remedies and the measures to control the incident of bank failure in the banking sector and the investigator concluded that the causes of bank failure comes under the following headings. Insider’s abuse, fraud and forgeries, inexperience staffing, poor attitude of bank management, recruitment of staff with low level academic qualifications, and high level of dishonesty among staff.

Specially, the objectives of the study are

1. To determine whether bank failure still exist in the banking industry.
2. To determine examine the causes and consequences of bank failure on Nigeria banking industry.
3. Determine to understand the degree of concern the bank management have shown in trying to prevent failure of banks.
4. To identify some of the enabling laws by the supervisory authorities to ensure depositors funds incase of bank failure.
5. To x-ray the poor accounting procedures adopted by the bank management staff.
6. To accomplish these objectives, a historical survey research design was conducted. Data were sourced only from secondary source, without questionnaire been used as an instrument of data collection.

Data collected were used to form the literature review by the researcher, and upon the literature review, findings, recommendations and conclusion was based by the researcher.