Debt Recovery Techniques in the Banking Sector, Problems and Prospect

Debt Recovery Techniques in the Banking Sector, Problems and Prospect

(A Case Study of Union Bank Nigeria Plc)

ABSTRACT

When banks face distressed, it is in the best interest of the non-distressed ones that have an effective resolution of them to carry out investigation. This is because the distress in one Bank can lead to a loss of confidence in the affected bank.

It can also affect a lack of confidence in the entire banking system, the corporation requires an enormous amount of money which the insurance fund through debt recovery techniques, and problem away out the prospect in the banking system.

Bank customers expect their bankers to provide them with loans and advance to make up for their fund; also the ability of Bank to maintain adequate profitable credit policy and debts recovery technique is always maintained.

The debt credit control department is not the center for banks and as such, they are mainly charged with the responsibility of making proper use of the shareholder’s fund for the benefit of the entire public at large.

The union bank of Nigeria PLC has been working for this same purpose.

Which study how debt recovery techniques employed by union bank of Nigeria plc are carried out in the banking system, towards the effective running of demand appropriate. Then, the case study method was adopted in carrying out this work, and data were collected from secondary and primary sources.

A secondary source of information includes this use of existing literature coupled with the use of some journals and other unpublized manuals that are seen to be useful to this work.

TABLE OF CONTENT

1.0  CHAPTER ONE

1.1 INTRODUCTION

1.2 BACKGROUND OF THE STUDY

1.3 OBJECTIVE OF THE STUDY

1.5 LIMITATION OF THE STUDY

1.6 REFERENCES OF THE STUDY

2.0 CHAPTER TWO

2.1 LITERATURE VIEW

2.2 REFERENCES

2.0 CHAPTER THREE

3.1 RESEARCH DESIGN / METHODOLOGY

3.2 SOURCES OF DATA

3.3 COUNCIL SAMPLE SIZE WITH

3.4 METHOD OF DATA COLLECTION

3.5 REFERENCES.

4.0 CHAPTER FOUR

4.1 FINDING

4.2 REFERENCES

5.0 CHAPTER FIVE

5.1 SUMMARY OF FINDING

5.2 RECOMMENDATION AND CONCLUSION

5.3 SUGGESTION FOR FURTHER RESEARCH

5.4 BIBLIOGRAPHY

5.5 APPENDIX

1.0 CHAPTER ONE

1.1 INTRODUCTION

Debt is not exempted from any successful business, because there must be a debt in every successful business due to activities involved in their operation.

Debt can occur as a result of banks overdrafts, borrowings fraud, forgeries, and so on, therefore bank recovery of debt is through the rules and regulations guiding the institution.

Then, another method of debts recovery is by the management of bad debt as a lender to explore all available sources for the repayment of debts, as it must be quite an unfriendly exercise carried out by the bank management against any defaulting customers to forcefully require the bank’s money in the recovery of debt process, there must be the consistency of the secondary position of the use of debt collections recovery by legal proceeding and also there should be room for debtors to invites the precedent law of the equitable right of redemption into debt consideration, to enable the debtor pelage for a further future date to pay back with interest occurred by the money borrowed: before any legal action can be taken, pending on the rules and regulation guiding the bank to recover, the basis on the transaction. Bank may adopt a way returning it debts from debtors. Debt recovery has been described as the responsibility for planning an effective economy that does help to regulate the operation of the banking sector in fulfillment of a given task or purpose.

Although apart from the above definition there are other definition by failed bank recovery debts and financial malpractice define debts recovery as a means of any loan advances, credit, accommodation guarantees or any other facilities together with the interest rate to show the outstanding unpaid against its customers in favor of the bank recovery debts from the debtors.

Besides the bank do encounter problem with its customers for the inability to pay back debts. Then, on the side of the banker, their supervision is poor in term of fund, documentation, and credit concentration, which consequently make the bank unable to meet its obligation on financial management.

1.2 BACKGROUND OF THE STUDY

The banking system has been single out among industry, which has heavier regulations than any other economic activities that governs its operation in the system, or its anticipation constituted by laws.

But the current banking sector has some constants widely acknowledge arising from non-performance of loan which create a number of factors such as poor management loan policy on income growth and unsound judgment, fraud, forgeries through federal government that set-up the Nigeria deposits insurance corporation (NDIC) to protect the interest which most have resulted to problem toward their operation, and its was established by decree No 22 of 1988. So the banking industry has been single to play a specific role in protecting the economic growth of due process and development.

Also there was a body or union set up by the federal government by decree No 18 of 1994 establishing failed bank (Recovery of debt and financial malpractice tribunal, that was authorized to recover the debt owed to the failed bank.

1.3 OBJECTIVES OF THE STUDY

(1) To identify debt recovery techniques in the banking sector.

(2) To indicate debt recovery techniques employed by banks.

(3) To find out the problem of debt recovery in the banking sector.

(4) To identify the prospect of debt recovery in the banking sector.