Banking Sector Reform In Nigeria: Implication and Challenges
Banking reform has been an on-going phenomenon in Nigerian financial sector. It has however, recently been intensified due to forces of globalization, which are guiding the integration of world’s financial markets and economy. Banking reforms have resulted from deliberate policy response to correct perceived or impending banking sector crisis and subsequent failure. This paper investigates the implications and challenges of banking sector reform in Nigeria. It examines the various roles played by banking reforms in the development of the Nigerian financial system, found out the prospects and the performance of banks after reforms are implemented, determine whether reforms have achieved its aim of strengthening the capital base of banks, and providing a healthy competitive environment among banks. Descriptive survey research was adopted for the study. A questionnaire of the Likert type was administered to one hundred and twenty-five randomly selected employees of the selected banks in Lagos metropolis, Lagos State. The collected data were analyzed using simple frequency tables and Zscores. The results showed that banking reforms in Nigeria have significantly improved the performance of the services provided in the industry, and that the challenges of banking sector reforms in Nigeria will guarantee its successful future operations. The study also indicated that banking sector reform in Nigeria have significantly strengthen a healthy competition in the industry. However, the respondents reflect that they have encountered operational problems during the reforms and most of these problems include problems of the system integration, computer failure, power failure, crash programmes and policy differences. Thus, the paper recommends that Nigerian banks should improve on the efficiency of the operation and also the policy makers should give more time to banks that have failed to meet up with the implementation exercise due to time factor to readjust. Also, government should always interfere to solve the problem of unemployment believed to have been caused by the banking reform. Similarly, for smooth running of the operation of the banking sector in the reforms and consolidation era, bankers should be given adequate training to meet up with the expectation.