1.1 Background of the Study

The problems of commercial banks in Nigeria is the topic of this research project. Some commercial banks in Nigeria are owned by government some by individual and other by a combination of both the government and individuals. Individuals establish banks for the purpose of making profit and to initiate business opportunity where they are available. Organizations on the other hand establish banks for profit making and probably to and business governments establish banks merely for development purpose. In recent time it has been the vogue for banks to be ridiculed and criticized for one reason or the other. These criticisms have emanated both from official and unofficial quarters and now tend towards a climax.

Commercial banks in Nigeria and other countries are established to carry out the following functions it deals in money and financial service provide efficient system for making payment to settle business and personal transaction provide safekeeping for customers money and valuables provide funds for production or consumers need convention of funds into assets. The Central Bank of Nigeria (CBN) is the apex bank. It performs the major role of monetary management through the issuance of annual monetary policy circular to banks. So commercial banks are faced with problems because the polices from the CBN are not always carefully throughout. These failures are due to the fact that the right questions, to problems of banks are matter asked nor right answers obtained. Some people attributed the problem of banks to their inability to match funds. In other words, the banks refuse to marry the duration for which deposits are placed with them with the duration from which they place funds with other banks. Other argues that some of the banks reduce the portfolio of loan and advance while increasing investment.

All these allegations leveled on these banks come from the management teams of banks in Nigeria. The problems of commercial banks were formerly attributed to a regulatory body like central bank of Nigeria (CBN) in experienced personnel and inadequate capital base were also of the problem. In recent time we have a regulatory body (CBN) finance house experience in the society but still management teams and board of directors cause major problems in banking sector.

Banks face other problems such as integrity factor location factor and technological factor among other. There also exist conflict of objective in the commercial banks. He political instability and the global economic recess affected the commercial banks negatively.