THE ROLE OF COMMERCIAL BANKS IN THE ECONOMIC DEVELOPMENT OF NIGERIA
Background of the Study
The availability of financial capital is a prerequisite for the rapid development and transaction of any nations economy, it is generally acknowledge that the provision and efficient management of the scarce resources is facilitated by the existence and appropriate functioning of financial institutions in the economy, it follows that bank have a vital role to play by making their vast financial resources available for financing and promoting development.
According to Anyaele J.O. (1990) commercial banks are institution set up purposely for safekeeping of money, valuable goods and documents like wills and others. He said the existence of banks has been a big boosts to business activities.
In an annual dinner of the Nigerian institute of bankers in 1975 in Lagos, the governor of central bank, Mallam Adamu Ciroma, blamed the “excess liquidity in the banking system.â€Â He saw the strict adherence of the commercial banking system to orthodox doctrine of lending short term loan as an in desirable act and urged commercial banks to take some risk in given medium and long term loan. Some of the changes that comes out of the foreign public reaction of commercial banks activities are in the area of declining contribution.
The banking system for the country should be National Development. Apart from acting as an agent for mobilization of saving, banking institutions will be expected to play a more dynamic role in the area of stimulation of investment and channeling of such investment to priority sectors of the economy.
2.1 HISTORY OF COMMERCIAL BANKING IN NIGERIA
Commercial banking activities started 1892 with the establishment of the African Banking Corporation ledger depositor and Co. a shipping company based in Liverpool was instrumental in it’s formation. This bank was however, taken over in 1984 by the bank of the British West African which later became standard bank and now first bank of Nigeria Plc with the bank on observation.
The next was Barclays bank and company (now Union bank of Nigeria Plc) was established in 1917. These banks were set up to provide banking services for the British Commercial interest and the colonial administration in West African when the west African currency board (Gyasi Central Bank) was set up in 1912, the bank of British became the agent of the currency board.
