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The important of banking as a concept cannot be over emphasized. This is because of the great and important roles it plays to promote the level of growth and development in all sector of country economy. Most especially in the developing countries like Nigeria. The word bank is derived from the Italian word “banco” meaning bench. The Jews in Lombardy, the early bankers conducted their business at benches in the market place. A bank could mean an organization or financial institution that has the regular practice of accepting deposit of valued commodities i.e. cash, precious metal, certificate, etc. from the general public which it returns on demand and which interest is charge or paid.

Different nations have maintained very unique and stylish banking system. However a simple observation could be made on the basic fact that all nations banking have consciously or unconsciously maintained a common feature in the area of performing the fundamental and the orthodox function of the banks.

The banking system in Nigeria is made up of many banks variously classified, for instance commercial. Merchant and development banks of various size and structures.


The growth and development of international trade along the west African cost played a major role in extending the medium of exchange beyond trade by barter in the nineteenth century the native currency system which relied on items such as cowries, manila, brass and copper rods had to accommodate foreign currencies such as maira the dollar trade British sliver coins. Increased trade motivated the setting up of the bank of British West African (BBWA) in 1894. Thereby drastically reducing the barter system and ushering in a rudimentary form of commercial banking which or discussion in this work will be restricted up on. The issue of legal tender currency for the West African region was however deferred till 1912 when the WACB was established.

The WACB was an offshoot of the recommendation of the Emmot Committee set up by the secretary of state, the Rt. Hon. Lewis Harcourt. The WACB retained the services of the BBWA as its currency distribution agent. It set up four currency centers in Lagos (Nigeria), Accra (Ghana), Freetown (Sierra Leone) and Barthurst (The Gambia). The currency in circulation in West African increased steadily through the 1950s in response to the growing demand for West Africa primary products (such as cocoa, groundnuts and palm oil) and increase in the world prices of such product.

The WACB, however did not have discretionary control over the monetary stock of the territories under its sphere of influence.

It was set up primarily to promote the financing of export trade, specially. It was charged with the issue of a West African currency. The exchange of existing currencies, the repatriation of such currency or currencies and investment of reserves. There was a fixed parity between the local currency and the British pound, while the currency had 100 percent starling coverage this in way facilitated Nigerians international payments. As the WACB was automatically lined to the British system, the investment policy was rather conservative in the sense that sterling reserved was invested only in British. In order to eliminate this deficiency and promote the growth of the domestic and capital markets, especially in the country marched towards political independence in 1960. The central bank of Nigeria was established by the central bank Act of 1958. The commenced operation on 1st of July 1959 with an initial capital of N3 million, which is the major focused of history in this work (working capital).


Owolabi (1972:26)3  has noted that towards the end of the 1950s the West Africans had started showing this discontent for the colonial monetary arrangements and were looking for an alternative arrangement which could satisfy their growing need and perhaps. Prepare them enough for the independence, which they were looking up to during the period.

Uzoagu (1981: 108)4 also observed that Nigerian nationalists never lost of the deficiencies of a currency board as compared with a central bank. A central bank unlike a currency board is a banking concerns if only an exclusive one. In its operations a central bank can grant to the government or to other banks or purchase securities. It can expand the currency without a corresponding increase in the external reserves. Conversely, a central bank can demand repayment of loans granted or sell securities and this can reduce the currency in circulation without loss of external reserves.

According to Inyang and Okere (1980:35)5  “the motion to create a central bank in Nigeria was first tabled in the house of representative in Lagos on 21 March 19952” the motion which was a private members motion called for the establishment of central base in all its phases.

The central bank was established in Nigeria to carry out some certain function, which includes the following.

1) Banking function: The main banking functions of the central bank of Nigeria includes;

  1. Currency use
  2. Banker and adviser to the government
  3. Banker to, and supervisor to, commercial /merchant banks and other financial institutions

2) Monetary function: The central bank of Nigeria attempts to use six instruments of monetary policy to control the banks in Nigeria these are

  1. Open market operation
  2. Discount rate system
  • Direct regulation of interest rates
  1. Moral suasion
  2. Reserve requirement and
  3. Direct control

3) The development functions: To promote economics development, the central bank of Nigeria has contributed immensely to the creation and development of financial markets to mobilize and channel savings for economics growth. Some of the developmental functions performed by the central bank of Nigeria are;

  1. The Nigerian money and capital markets
  2. CBN’s Role in other government sponsored financial institution
  3. Maintaining external reserves
  4. Exchange control
  5. CBN’s Role in national economics policy formulation etc.

Having talk about the origin of banking system in Nigeria and the establishment of central bank of Nigeria, we take a little look on the development of commercial bank in Nigeria and their basic functions.


 BRIEF HISTORY: The first commercial bank. The African banking corporation-opened its first branch in Lagos in 1892. Messer. Elder Dempster & Co, a shipping firm based in Liverpool, was instrumental in its formation. The bank experienced some initial difficulties and eventually decided to transfer its interest to Elder Dempster & Co, in 1893. This led to the formation of a new bank known as British bank of West African (BBWA) in 1893 with ₤10,000 capital later 00,000 during the same year. it was registered in London as a limited liability company in March 1894 and first Lagos branch was opened in the year. Other branches were opened in major parts of West African including Nigeria.

Another commercial bank was also established called Anglo- African Bank 1899 in old Calabar by the Royal Niger company. (Now UAC) with BBWA. All these commercial Banks that was established then have some deficiencies, which led to the establishment of indigenous banks. In 1929, the industrial and commercial bank was set up by a handful of patriotic Nigerians. It folded up in 1930 due to some problems like under capitalization, poor management and aggressive competition from the expatriate banks. May other indigenous banks also exist in Nigeria before the inception of the real commercial banking in Nigeria.


The structure of commercial banking in Nigeria is jailored towards that prevailing in the UK. Other countries in the commonwealth and indeed most countries of western world, have the same structure. Commercial banking in characterized by branch banking system.

Some services offered by commercial banks;

  1. Mobilization of saving and other deposits
  2. Extension of credit facilities to customers
  3. Providing facilities for the transfers of funds
  4. Management of customers investments and advising on insurance matters
  5. Creating money
  6. Providing facilities for the financing of international trade (e.g documentary credits)
  7. Safe keeping of valuables
  8. Brokerage services (i.e. buying and selling of stock and shares) for their customers
  9. Providing foreign exchange facilities for travelers
  10. Providing night safe facilities
  11. Providing business status reports and references; and
  12. Business advising services.


Banking as a concept in Nigerian federalism has been a problematic, conflictural and controversial issues to the extent that it has formed the basis upon which most of our newspapers, magazines etc both at the state and the national levels have laid more emphasis. As a result of this problems. The Obasanjo administration on July 6 2004, the central bank of Nigeria (CBN) through it Governor, Charles Soludo (who some people now call Soludo solution” because of his unprecedented bold and courageous steps to restructure the banking sub-sector) announced a new reform programme for the banking sector designed to ensure a diversified, strong and reliable banking sector which will ensure the safety of depositors money, plays active developmental roles in the Nigeria economy and competitive players financial system. Therefore, with very hope we believe that the introduction of N25 billions as a minimum capitalization for Nigerian commercial banks, ‘deadline, say, 31st December 2005 will be of a great help in solving these problems facing Nigerian banking sector.


The major purpose of this research is to investigate the impact of working capital on the corporate goals of an organization (commercial bank) in Nigeria and to provide some possible solution to this problem as much as possible. This work also looks at the two phases of this impact, the negative and positive aspect of it and the implication as well.


The major significance of this study is that it enable me to determine the great impact and importance of working capital in a corporate goal of organization (commercial banks in Nigeria) .

Besides, the study shall be of prime importance to both students and teacher / lecturers who may like to carry out on further researches on the topic, as this work shall help provide us the solution to the problems facing Nigerian commercial banks in times of working capital goals and objectives of the banking industry or sector.


The study focused mainly on the impact of working capital on corporate goals of an organization in Nigeria (commercial bank).For the purpose of the study Nigeria commercial banks as a case study of all states trust bank has been used as the area of concentration. The research in pursuance of this, decide to use all states trust Bank working capital and their officials. Again, it is pertinent to indicate here some of the difficulties encountered by the researcher on the process of carrying out this research work. Among those problems and others includes rack of current newspaper(s) that dealt on the topic, lack of fund, which would have helped the researcher to equally extend his research to other neighbouring countries and also for materials which could have helped the researcher. Besides, the researcher has a limited period of time to complete his research work and as a result of that, he was unable to carry out more investigations, as he ought to have done if enough time were given to him.


The following questions are used to represent the basic sources of investigation on the topic termed, the impact of working capital on the corporate goals of organization in Nigeria.

The research questions are as follows;

  1. What are implication of working capital that do exist in the commercial banks?
  2. Is there possible solution to the problems of working capital?
  3. Is there cordial relationships among (ASTB) workers?
  4. What is the effort of general manager of (ASTB) to restructure the working capital of the bank?

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