The multifarious Roles of Banks in the Modern DaySociety.

The banking industry around the world has witnessed remarkable changes in recent decades, given the increasing wave of globalisation, structural and technological changes as well as, integration of financial market. In Nigeria, the ability of the banking industry to play it's expected role has been periodically punctuated by it's vulnerability to systematic distress and macro-economic volatility making policy fine-tuning inevitable.
Banks in the moden day society, almost every where, plays a multifarious role, which includes unifying and intermediary roles between the fund-supplying and fund demanding sides of the society, executing savings and investment functions. As at the end of June, 2004, there are 89 banks operating in Nigeria, comprising institutions of various sizes and degrees of soundness. Structurally, the sector is highly concentrated, as the 10 largest banks accounted for about 50% of the industry's total assets/liabilities.Most banks in Nigeria has a capitalization of less than $10 million. Even the largest bank in Nigeria has a capital base of about US $240 million compared toUS$526 million for the smallest bank in Malaysia. The small size of most of our banks, each with expensive headquarters, separate investments in software and hardware, heavy fixed cost and operating expenses, and with bunching of branches in few commercial centres leads to very high average cost for the industry.