Title page

Certification page ii

Dedication iii

Acknowledgement iv


Table of contents



1.1 Background of the Study

1.2 Statement of the Problem

1.3 Objective of the Study

1.4 Research Questions

1.5 Research Hypothesis

1.6 Significance of the Study

1.7 Scope of the Study

1.8 Limitation of the Study

1.9 Definition of Terms


Literature Review

2.1 Management

2.2 Theoretical Frame Work Literature Review

2.2. i Central bank of Nigeria Recent Policy on Financial Institution

2.2. ii Nigeria Financial Review in the Financial Institutions

2.2. iii Kingstone Bank Operational Rules Regulation and Result

2.2. iv Government Policy and Decree on Financial Institution

2.2.v Government Roles in Financial Institution



Research methodology

3.0 Research Design

3.1 Population of the Study

3.2 Sample Size Determination

3.3 Sampling Procedure/Techniques

3.4 Method of Data Analysis


Analysis of data presentation of result

4.1 Introduction

4.2 Question 2

4.3 Summary of Result



5.1 Summary of the Study Findings

5.2 Conclusion

5.3 Recommendations

5.4 Suggestion for Further Research



Appendix 11





Management has been defined as the process of combining and utilizing organization’s resource of managerial to accomplish organization objectives. It is also a process of entrusting responsibility for effective planning and regulation of operation in an enterprise in fulfillment of a given purpose or task.

What then do we actually means by interference? Interference according to Webster’s dictionary is to take an active but unwelcome part in some else activity.

In this study it has been revealed that interference on financial institution by government as a whole is a noble in the right direction. This Niger financial system is very vibrant and highly competitive they have four basic product lines in the banking industry such as deposit base product, lending base product, fee base product, and technology base product. This was instituted by the observation during the research that financial institution benefited immensely by the government on the financial institution.

It is well known fact that number of service of financial institutions offers have increased by taking a fundamental nature of their business and it remains unchanged. This led to the conclusion that management in financial institution is surrounded with risk. Management which involves mismatches of assets and liabilities and it is cost borrowing and lending on the other side. To nurture the economy is to loan the part of development that has been the role of financial institution, mostly banks which has been constrained by number of facts in to the past price. 

Now the industrial sector has been characterized by massive government involvement because of weak technolocal base, lack of linkages in infrastructure and policy investment highly production cost and goods that were uncompetitive internationally. Over the entire micro economic environment was highly unstable, witnessing capital fight, high interest or inflation rates negative real growth rates and fiscal excesses. With an external debt burden of about 27.46 at the end of 1997, the repayment burden put constraint on growth. Since 1995, however the federal government has been able to store some measure of fiscal discipline through low budget deficits which achieved stable interest and exchange rates regimes while pushing down inflation to a simple digit of 8.5 percent in 1998.

Aggressive reform and sanitation of the financial institution source were pursued. On the other hand, little or no attention was paid to the vital area of privatization of government utilities liberalization of the economic and improvement of infrastructure. The above review of the economy has been undertaken and other financial institutions were supposed to operate and provide financial to the industrial sector. Therefore, form the above review the researcher wants to use this study to explore those factors emanated from government interference in the management of financial institutions that inhibited them from effective discharging, their responsibility to the economy generally using the rules and regulation of Kingstone bank PLC to determine the extent it has contributed both positively and negative part of such interference in the institution. 

The Nigeria institution is very vibrant and highly competitive. It consist of 105 viable commercial and merchant banks which are privately owned with a total of 2, 400 branches and development bank such as NBC, NIDB, PBN AND FMSN owned by the government. There are about 200 registered non bank finance houses of various sizes, part of the structural adjustment programme (SAP) introduced in 1986. This was the expansion and diffusion of the banking sector which has grown to 67 commercial and 55 merchant banks then 45 primary mortgage institution 228 branched of the people bank, 618 finance companies, 48 fully licensed by the CBN, 401 community banks and specialized bank by this null 1990’s there was endemic distress in financial system which led to collapse of many of the institutions in the industry.

Many commercial and merchant banks were liquidated with 26 banks (13 each for commercial and merchant) liquidated as recently as January 16, 1989. In this case, Kingstone bank of Nigeria PLC Enugu revealed that government interference in the management of positive type. Even though that there are some risks in embodying such rules and regulations line is their banking system such as deposit based on product lending base, product fee base, products and technology base.

Therefore the interference has help to accept the risk job of greater mobilization of saving from the surplus units and channel them to the deficit productive units of the economy and to ensure that no unable project is frustrated due to lack of funds and greater facilitation of synergies and sartorial linkages within the economy. 

There are still problems resulting in such interference of which Kingstone bank are complaining of.

The effect of government interference in the management of Kingstone bank plc also covers limits of permissible business risk concentration capital and liquidity adequacy and statutory returns. The monetary aspect of regulatory includes control of over loading general structure of leading rates reserve requirement and foreign exchange. There are also regulations covering advertising staff loan. Loan directors and inside dealing supervision is employed to ensure effective management and control. The criticism led to gradual deregulation in 1984 and was subsequently accelerated with the adoption of (SAP) programme which gives room for the operation of free market forces given financial instructions and more direction to their operation and stimulation competitions in the financial system as a whole.

Consequently in 1988 the Nigeria deposit insurance corporation was established with regulatory power to protect depositors against bank failure and thereby strength the financial and impacted greatly on financial institution environment. 


Despite the interference of government in the management of financial institution existence in Nigeria especially in the area of control regulation and operation. Regulation does not guarantee that they will reverse bank failure and serious banking crises. No matter how effective and thorough the regulationary mechanisms are the problem may still occur as history has shown it. Even with high policy and regulation which usually accompany a serious bank crises or bank failure, it is to prevent impact of such failure from threatening the systematic last resort function on central bank.

Establishing of more financial institutions by both government and individual were implemented to solve the problem of poor service to customers and also dominance of foreign based bank by Nigeria indigenous bank to help in encouraging improved banking system in Nigeria, but still there is high production costs and goods that were uncompetitive, internally high interest rates and right among bank directors and unprecedented industrial unrest within the sector it exist due to shallow knowledge of management policy and regulation in this sectors of economy which help in paralyzing the whole system.

Also the problem exists due to hard core of such regulation and deregulation of policy to the financial institution.


The main purpose of this study are: 

1. To find out how Kingstone Bank of Nigeria PLC is employing the government policy to ensure sound banking system towards acceleration of economic development in Nigeria 

2. To determine their growth and survival in the faces of various banking ordinance that was consolidated in central bank number 24 decrees of 1991 and the present day decrees.

3. To ascertain the effect of government interference in the management of financial institution and type of environment it has created for the proper existence of financial instruction whether it is on the right director. 


1. Have the regulatory roles made Kingstone Bank big, strong, and reliable?

2. Have government interference created a greater mobilization and measures in financial institution? 

3. Have the regulatory rule experienced better than deregulatory role today?


In order to give focus to the study the following hypothesis were formulated. 

Ho: the quality of sources rendered by the Kingstone Bank lead to increased on people patronage.

Hi: the quality of service render by government interference to management.

Ho: the cost charges on services by bank to citizen.


The findings of this study would be useful to the Kingstone Bank of Nigeria PLC and the management of financial institution in general as a guide to the banking system and formation of policies and decrees relative to the effectiveness the institution. The study would provide a data base for future researchers on the effect of government interference on financial institution. 

The study also serves as an additional material to the work will as a long way in educating the readers on the significance of examining the achievement of government and how it helps to improve economy sector mostly on the part of monopoly especially in financial institution.

The study will provide in data base for future researcher on the effect of government interference on financial institution.

The study also serve as an additional material to the work and it will go a long way in educating the renders on the significance of examining the achievement of government and how it helps to improve economy sector mostly on the part of monopoly especially in financial institution.

The study will provide in data base for future researcher in government interference in the management of financial institution and add to the material outstanding in the library.

This study would be of important to any reader and assist government and financial institution in reviving their various policies.


This study is intends to cover:  

a. The new policies and decrees introduced in financial institution since the inception of structural adjustment programme in 1996.

b. The impact of these policies on the operation of Kingstone bank of Nigeria PLC

c. The challenges posed by these policies and decrees and the central bank effort to control the problem that arises by the implementation of the policies and regulation.

d. This study will also cover the problems of Kingstone bank of Nigeria PLC which they encountered due to some government control in the management of their affairs and also the position aspect of the policies to the management of Kingstone bank Nigeria PLC.


Studies of this nature are prone to limitation. My experience during data collection are the most of the respondent interrogate when regulate to addressing the question pose to them. They contended that this would be tantamount to exposing the company’s policies to the public and that their competition will capitalize on such policies of divulged.


In spite of the fact that the researcher explained the management of Kingstone bank that her study was purely academic test and the management was reluctant to information.


Enough time required for collection of data and other relevant facts. The researcher a final year student has to case the already limited time partly to read because of the work for her examination this time has affected the researcher.


A thorough research work imposed a huge financial burden that cannot be borne easily by a student for this reason the researcher had to be restricted to a small financial institution. (Kingstone Bank Nigeria PLC Enugu) 



This is the organization that responds to the financial system in the country, they provide both short term and long term fund. 


Being active progressive and consistent to financial institution operation on service. 


Regulation is an act of being regulated or control role of governing a group of people.


A selected planned line of product in light at which individual decision is made and co-ordinate achieved. This can be chosen by government or business.


Valued too much.


Managing or being managed by the body of those in position of administrative authority.


Interference is to take an active but unwelcome part in some active




Management is a group of related ideas that provides guidance to a research project or business of a theoretical frame work that a marketing department is using to promote its corporate and product image to the consuming public can be important determinants of its ultimate success.

According to Theodore C. Levitt A German born American economist and professor of the Harvard Business School best know for coining and popularizing the term “globalization” the term first appeared in an article published in 1983 in the Harvard Business Review entitled, 

“The globalization of markets” Theodore C. Levitt was also editor for the Harvard Business Review and died in 2006 at the age 81 

Kendra Cherry the term theory is used with surprising frequency in everyday language it is often used in to mean a guesses, hunch or supposition. You may even hear people dismiss certain information because it is “only a Theory” it is important to note as you study psychology and other scientific topics, that a theory in science in not the same as the colloquial use of the term. A theory is a based upon a hypothesis and baked by evidence. A theory presents a concept or idea that is testable. In science, a theory is not merely a guess. A theory is a fact based framework for describing a phenomenon. In psychology, theories are used to provide a model for understanding human thoughts, emotions and behaviors.

A psychological theory has two key components:

1. it must describe a behavior 

2. it make predictions about future behaviors


Throughout psychology’s history, a number of different theories have been proposed to explain and predict various aspects of human behavior. Some of these theories have stood the test of time and remain well accepted today. Others have not held up under close scientific scrutiny, and may have been rejected altogether or only partially accepted by researchers today.   


The Nigeria financial sector has attracted the attention of most sectors, in recent time. This according to observed data attempt has been made in this study by means of statistical analysis to extract the magnitude of the changes which have accrued Nigeria financial system since the introduction of structure reforms in their mid 1980’s. however the rapid globalization of financial market, concern has heightened over declines in the level of savings investment and rte of failed banks Nigeria has exerted pressures on natural, monetary authorities to re-examined and revaluated their domestic policies with view of finding solution the structural adjustment programme was introduced in 1986 to liberalize the financial and payment systems in this case interest rtes were de-regulated. The process of licensing new banks simplification (NDC) was established to reinforce confidence in the banking industry. Since 1986 Government through central bank of Nigeria has adopted numerous monetary and structural policies armed at depending on the financial system and reducing the level of financial repression in the banking industry. These measure included the following; the market principle of free entry and free exist into the banking industry, the introduction and strike enforcement of prudential guidelines and mass disqualification of unfit and improper personnel in the management of banks other include the abolition of credit allocation and interest ceilings phase elimination of mandatory stabilization security requirement, deregulation of interest rate regime and the ten total increased in minimum paid up capital requirement by banks in order to eliminate contagious effort. According to Nnamarie et al in (1999) CBN economy and financial review Vol 36 No 2. The reform measure have been largely successful this they said represented sufficient evidence that if central bank of Nigeria is guaranteed legal and operation autonomy it will give financial liberation and occasional intervention aimed at correcting market failure arising in the financial system.

There has been an article book and seminar on sector, unfortunately no deep discussion on the future of sector is seen especially with regard to government interference through policy formulation has advanced until the progation of central bank of Nigeria, decree No 25 of the year 1991.



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