IMPACT OF BANKING REGULATIONS ON COMMERCIAL BANKS PROFITABILITY IN NIGERIA (A CASE STUDY OF FCMB)

ABSTRACT Banking laws and regulations are meant to guide the operations of banks in Nigeria. Nigeria’s banking sector over the years witnessed series of regulatory frameworks for a safe, stable and efficient financial system. In spite of the operation of their laws banks especially commercial banks are not finding their laws feet in the economy as evidenced by recent banks failures. This project focuses on the impact of banking regulations and commercial banks profitability which constitute the central objectives to this research work. Also, other focus of this study are; the efficiencies and effectiveness of various banking regulations, evaluation of how supervisory and regulatory functions of the regulators CBN impacts on Nigerian banks. This work also assessed if the people of public have access to relevant information pertaining to banking operation and the negative and positive impact of banking regulation on commercial banks profitability also looked into. This study is informed by the two variables which are; Banking Regulations and Commercial Banks Profitability. The independent variable is Banking Regulations while the dependents variable is Commercial Banks Profitability. Moreover the variables are relatively qualitative in nature. This research work also adopted a sample survey where a representative percentage of the whole population are used. A total number of 50 (fifty) respondents were sampled from FCMB which serve as the case study of this research work. A close ended questionnaire served as a major tools for the collection of data under this study which is designed with a Likert rating scale. The questionnaire is also divided into two sections; A and B, the section A provided the bio-data of the respondents while the other section are aimed to provide answers to the research questions and objectives. The data gathered from both primary and secondary sources are analyzed using descriptive and inferential statistics such as frequency distribution and percentages with the help of SPSS. This project observes and integrates that there is a significant relation between banking regulations and commercial banks profitability in Nigeria i.e in contemporary Nigeria 2015 till date banking regulations one of the major determinants of commercial banks profitability. This project concludes that incorporation of many functional regulations and approaches as well as effective monitoring of those regulations should be a major concern of all banking regulators in Nigeria and therefore recommends that; there should be adequate consultation with stakeholders before enforcement of any forms of regulations. Also, monitoring and performance evaluation of the existing regulations should be periodically and consistently put into consideration most especially by adopting the Outcome or Objectives Evaluation which will allow the Regulatory bodies to be in contact with at least one person or group in the target population to known whether the regulations is being effective in meeting its objectives. However, the regulatory and supervisory bodies in charge of formulation and formations of banking laws should try as much as they can to make sure that the nature of the regulations are not too rigid and also ensure that there is a general balance in the regulation; one party should not be benefited that the other i.e the banks customers should not be too favorable than the commercial banks as this can inhibits there profit. Lastly, over confidentiality attitudes of commercial banks when it comes to dissemination of information to their customers should also be minimize if it cannot be totally eradicated as this can also serve as hindrance in generation of profit. Relevant documents or information that will be useful to customers should be share. KEYWORDS: Bank supervision, Profitability, Commercial Bank, Stable banking system, Monetary policy, Redtapism, Financial Intermediation, Banking regulation, On-Site Supervision, Off-Site Supervision, Maiden Examination and Routine Examination.