Background, context, and significance of Commercial Banks in Nigeria

Unlike modern institutions, Nigeria is also one of the developing countries that are focused on the financial institution of banks and concerned about foreign banking like other countries. However, in the Nigerian scene, the banking sector was introduced in the last decade or in the 19th century; when there was only the Bank of British West Africa that was established in 1894. Moreover, after some years Barclays Bank D.C.O. in 1925 combines with it. In 1933, the National Bank of Nigeria founded and it was focused as the first indigenous bank; where there was a level of economic activities for the indigenous people. However, the indigenous people were illiterate so that banks and banking business was very poor. The banks’ capital has been risen up to 2 billion Naira to 25 billion Naira along with a reduction in the number of banks from 89 to 25 in 2005, and these reforms impact can be easily seen in the banking sector of Nigeria. Thus, then for the benefits and effective understanding and protection of the customers; the Bills of Exchange Act of 1917was proposed as the part III in which there were the deals regarding the cheques drawn; in the Act then then there was some amendments with the Bills of Exchange Act, 1964; however, the bankers and customers were provided some protection based on the legal material in this way (CENTRAL BANK OF NIGERIA, 2017).

Context of the study on Commercial Banks in Nigeria

Regarding the policies that are mentioned in the Central Bank of Nigeria; it is known that there are different kinds of fee structure that the customers have to pay according to the requirement; as there is the Lending Fees, Restructuring Fee, Management fee, Commission charges, etc. However, as mentioned that the total lending fees exceed 2 percent and the Management fee is covering the appraisal, ancillary, processing. There are also other related fees based on the applications of the customers. The banks are charging the customers on the charges like commission on turnover and the debit transactions. However, these are some sources from which the banks are earning as these are some secondary source of income. There is the need to pay interest, when the customer's deposits as in the way, the banks in Nigeria charge a fee per N1,000 value. However, charge a fee is based on the withdrawal transaction, it is also concerned that CBN Nigerian bank also focused on the ceiling on the maximum amount that bank can charge on the customers, as there are some limitations based on the COT per mille (per 1,000). There is the policy against excessive charges as the Central Bank of Nigeria incurs an N200 per leaflet fee (DAMILOLA, 2018).

Significance of the study on Commercial Banks in Nigeria

There is the great significance of this study as there it is need to be noticed that ehy banks are imposing the charges on cutomers, however, concerned in the literature that banks in Nigeria are focused on taking the withdrawal charges from ATM, Cost of transfers and sms alert charges from  the customers. However, there is the fee on every transaction because Nigeria wants to grow in the banking sector and demand the success like other successful nations.The fee structure is emphasized on the client or the customers of the banks according to what they demand or what application or requirement is there. Moreover, for the Seven (7) days there is the no penal or punishment charge on the late repayments. Management fee w3hich is for the restructured facility, or the commitment fee can also be negotiable based on the maximum of 1%; based on undisbursed amount. For the new customers, or who have processed the application for the first time need to give the double amount (CENTRAL BANK OF NIGERIA, 2017)

References of Commercial Banks in Nigeria

CENTRAL BANK OF NIGERIA. (2017). THE GUIDE TO CHARGES BY BANKS AND OTHER FINANCIAL INSTITUTIONS IN NIGERIA.

DAMILOLA, B. (2018). How Banks Exploit CBN's Weakness To Impose Excessive Charges On ATM Users. Retrieved from http://saharareporters.com/2018/05/16/how-banks-exploit-cbns-weakness-impose-excessive-charges-atm-users