CHAPTER ONE
INTRODUCTION
The importance of the banking sector in any economy derives from its roles in financial inter-mediation, provision of an efficient payment system and facilitating the implementation of monetary policies.On Tuesday July 6, 2004, Professor Charles Soludo the Governor of Central Bank of Nigeria at a special session of the bankers committee in Abuja unveiled a 13 point reform agenda to banks chiefs which included an upward review of banks capital base from N2billion to N25 billion which is the first phase of the banking reforms. The decision according to him to raise the capital base of banks was with the aim of strengthening and consolidating the banking system. Besides strengthening the Nigerian banks with the new capital, Soludo also explained that it is intended to stem the banks distress that has been a problem to the banking sector.
According to him in his paper presented at the special session of the bankers committee in Abuja,The inability of Nigerian Banking System to voluntarily embark on consolidation in time with the global trend has necessitated the need to consider the adoption of appropriate legal and supervisory frameworks as well as comprehensive incentive package to facilitate mergers and acquisition in the country as well as crisis resolution option and to promote the soundness, stability and enhanced efficiency of the system. Soludo (2004:4).The Nigerian banking sector reforms remained a reference point for the positive development in the Nigeria economy, African region and the world. Presently, the new banking environment created by the reforms has made possible the de-listing of Nigeria from the Financial Action Tax Forces (FATF) register of countries that are in breach of the global anti-money laundering and anti-corruption code.
1.1 BACKGROUND OF THE STUDY
In boosting the effectiveness of the banking industry, Oceanic Bank International Plc plays a vital role by mobilizing funds from the surplus economic units to the deficit units for the purpose of stimulating the economy while making profit to satisfy different interest.Oceanic Bank International Plc was incorporated on March 26, 1990 as a private limited liability company with 100% equity ownership by Nigerian citizens and was licensed on April 10, 1990 to carry on commercial banking and it commenced business on June 12, 1990 at the water front plaza 270 Victoria Island, Lagos as its head office. In spite of the numerous bank distress observed within the Nigerian Banking sector, the bank has had a relatively good reputation. Oceanic Bank International Plc is one of the largest in Nigeria and has its location in several parts of Nigeria. Her financial year runs from October 1 to September 30 of the subsequent year.
The bank has had an impressive performance over the years for the quality of its customers portfolio which includes corporate organizations and high net-worth individuals. Following the Central Bank of Nigeria (CBN) reform effort on banks to increase their share capital from N2 billion to N25 billion before 31st December 2005, the bank was among the first that met the requirement. The Oceanic Bank International Plc was listed on the Nigerian Stock Exchange on June 25, 2004 and at present it’s authorized capital is N32 billion.