IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 11 NO. 1 2025
DOI: 10.56201/ijbfr.vol.11.no1.2025.pg58.77

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Banking Regulation and Performance of Banks in Nigeria

Michael, Emmanuel Ikpe, Jeremiah, Mfon S. Akpabio, Etenam Ebenezer, Uduak Udontre

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Abstract

Banking regulation is an on-going exercise in the banking industry in order to enhance the performance of banks and position the banks for efficient and effective services. We examined banking regulation and performance of banks in Nigeria to assess the relationship between regulators’ policies such as cash reserve requirement (CRR), liquidity ratio (LIQR), capital base requirement (CAPR), monetary policy rate (MPR) and credit to private sector (CPS). The study covered the period spanning 2008 and 2022. Ex post facto research design was employed in the study. The results revealed that CRR, CAPR and MPR exhibited a positive relationship with CPS whereas LIQR exhibited a negative relationship. In addition, only CRR and CAPR exhibited statistically significant relationship with CPS. Regulators are enjoined to caution banks not to lend excessively to private sector hoping to be rescued by the amount of cash reserve with CBN in case of any misfortune. Findings also strengthen the need for bigger banks judged by capital base in order to boost the quality of transactions they can financed.

keywords:

Banking Regulation, Performance of Banks, Capital base requirement, Cash

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