CHAPTER ONE

INTRODUCTION

1.1              STATEMENT OF PROBLEM AND PURPOSE OF STUDY

The master key to the success of any institution (financial and non – financial) according to Henri Fayol in principles of management 1. is the effective management system.

            This could be achieved through the handwork of the director, managing director, management staff and all other workers in the organization. The major role lies on the head of the board of directive (BOD) and managing director.

            Management according to Luther Gulick simple means the organizing planning, implementing, controlling and directing of resource in an organization.

            This study is based on financial institution like banks, and there are two type of resource that can be found in a bank they are human and material resource. Material resource includes money and other inanimate objects found in bank. Management is a personal thing that requires a personal touch

The purposes of the study are as follows

• To find out he cause of mismanagement in banks
• To study how it is executed by the appointed officers and staff of banks
• To know its influence on the banks affected and the government
• To determine whether it affects economy of the nations
• To find out the means that can be adopted by banks to solve and put to and the mismanagement of resources

1.2       RATIONALE OF THE STUDY

The study of mismanagement in financial industry (bank) is necessary now because.

            The study will enable the society or country understand when a bank is badly manage by the staff or official. This can be seen now as a result of banks mergering and acquisition when a bank cannot manage it resource according to central bank, this policy was designed to ensure strong and reliable banking sector capable of ensuring the safety of depositor funds and play active role in Nigeria. Economy.

            Bank in order to meet up with the challenges, bank have resorted to consolidation through mergers and acquisition.

            Improved management: business can also combined for the purpose of acquiring needed management talent in order to gain access to the well established market research and development strategies already development.

            Effective utilization of resource

This bring about increased output in plant rationalization and coming together of compatible sales operation, concentration of technical skill, specialized manpower, as well encouraging the industrial or company product and marketing unit.

1.3       SIGNIFICANCE OF THE STUDY

This work has been carried out with all skill, care and caution so as to be able to provide the desired and required purpose and meet the aspiration of as many that will find it worthy to use for further research.

            Therefore, it will go along way to helping in the resuscitating of our financial institutions, especially the banking industry which had experienced lots and lots of financial leakage leading to bank mismanagement and bank failure in the last decade.

            Benefits for his work:

Education the public on the issue of bank distress

Inculcate into individuals, firms and organization who may have had that distrust for banks finally and importantly advice bank management on the best measures to take to or reduce the effect of mismanagement in the banking industry sectors.

1.4              DEFINITION OF TERMS

Mismanagement simples means bad management.

Bank

A bank is an institution that is prepared to accept deposit of money and repay cash on demand. It can also be defined as an institution where money and other valuable, which include tangible, are kept for say custody or purpose, Webster’s, financial dictionary.

            Material resource in banks are the inanimate things found in the bank like, money, books, computers, furniture and others material being used in the banks. Also, its building and environment.

            Human resource in banks means the labour force or people working in the banking industries.

            Liquidation means to put to end an unsuccessful business company.

Liquidity can also the ability of a bank to meet its short term obligation as and when due for payment. For a bank to maintain good liquidity position it must keep adequate volume of non earning assets such as cash, call money, treasury bill etc.

Profitability

This is the concept that measure the level of income which ban earns from its  operation. The banks are set up to make profit and their profitability position an index of measuring the performance of the banks.