THE IMPACT OF CENTRAL BANK OF NIGERIA PRUDENTIAL GUIDELINES ON THE FINANCIAL STATEMENT OF LICENSED(A CASE STUDY OF FIRST BANK OF NIGERIA PLC AND UNION BANK OF NIGERIA PLC)
ABSTRACT
The prudential guidelines for licensed banks which are based on global banking standards, imposed far- reaching requirements in the classification of risk assets and provision for bad doubtful debts. Since its introduction in November 1990, thee implementation for the guideline has had a profound impact on the operations of banks. In this project, the researcher has succeeded in identifying the features of guideline as well as its impact on published financial statements of commercial banks in Nigeria. Published financial statements of the banks for the period of the inception of prudential guidelines were examined with that of the period of the case study. Both primary and secondary sources of debts were used in the course of the research. Two hypotheses were tested using Chi-square test and correlation analysis. The research work revealed among other that:
- The net profit position of commercial banks in Nigeria has been significantly altered since the implementation of the prudential guidelines.
- The provision for bad and doubtful debts of commercial in Nigeria has significantly increased since the implementation of the prudential guidelines.
The exercise were concluded with recommendation which include among others that:
(1)                  Credit decisions cannot    be based entirely on any set of credit guidelines analytical techniques- banks should note that prudential guidelines should at best provide the maximum requirements or be the starting points for the credit policy of each bank which in itself should be more prudent than the prudential guidelines.
- Banks should generate lending policies that would de-emphasize reliance on securities and what can be realized from them. Instead banks may now focus on some more desirable qualitative characteristics of loan applicants such as character, willingness and ability to pay.
TABLE OF CONTENT
CHAPTER ONE
- INTRODUCTION Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 1
1.1   statement of problem                                                 5
- Purpose of the study                                                  7
- Significance of the study                                           9
- Statement of hypothesis                                            10
- Scope of the study                                                     11
- Limitation of the study                                                12
- Definition of terms                                                      13
