Isaac Scientific Publishing

Frontiers in Management Research

Bank Failure in Nigeria: Evidence of Prudential Regulator Laxity

Download PDF (180.4 KB) PP. 141 - 150 Pub. Date: October 10, 2017

DOI: 10.22606/fmr.2017.14003


  • Iwedi Marshal*
    Department of Banking & Finance Rivers State University, Port Harcourt, Nigeria


The series of bank failure in Nigeria have raised doubt in the minds of banking and non banking public about the efficacy of the prudential regulator and its frameworks. This is due to the fact that a substantial number of these groups are questioning the roles of the prudential regulator saddles with the responsibility of regulating and supervising the activities of banks together with the laws governing the operation and conduct of banking business in Nigeria. The incessant failure witness in the banking sector over these years is captured by the number of failed banks, spate of non performing credits, the debt and extent of required capitalization, loss of depositors funds and the general impact on the economy all of which underscores the importance of the sector. A study of this nature examined bank failure in Nigeria and those responsible for such series of failures. It was discovered that the Nigeria banking sector regulatory authorities are responsible and are to be blamed for these incessant rates of failures in the banking sector of the Nigeria economy. We conclude that the failure experience in the sector in recent times is attributed to regulatory laxity on the part of the prudential regulators occasioned by their inability and delay to carry out some of its routine, off site, and on site functions as stipulated in the mandate establishing CBN and failures to ensure compliance to the prudential guidelines.


Bank failure, prudential regulator, regulatory framework, Nigeria economy.


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