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The banking sector in any economy serves as a catalyst for growth and development. Banks are able to perform this role through their crucial functions of financial intermediation, provision of an efficient payments system and facilitating the implementation of monetary policies. It is not surprising therefore, that government the world over attempt to evolve an efficient banking system, not only for the promotion of efficient intermediation, but also for the protection of depositors, encouragement of efficiency, competition, maintenance of public confidence in the system, stability of the system and protection against systemic risk and collapse.
Supervision of banks remains an integral part of the mechanism for ensuring safe and sound banking practice. At the apex of the supervisory framework for the banking industry is the Central Bank of Nigeria (CBN). The Nigerian Deposit Insurance Corporation (NDIC) however, exercises shared responsibility with the Central Bank of

Nigeria for the supervision of insured banks. Active co-operation exists between these two agencies on both the focus and modality for supervising insured banks. This is exemplified in the coordinated formulation of supervisory strategies and surveillance on the activities of the insured banks, elimination of supervisory over lap, establishment of a credible data management and information sharing system. In the main, bank supervision entails on-site examination of the institutions and off-site analysis of periodically rendered prudential returns, a process called off-site surveillance. The two activities are mutually reinforcing and are designed to timely identify and diagnose emerging problems in individual banks with a view to prescribing the most efficient resolution options. In line with prevailing international standards, these agencies (CBN and NDIC) have continued to emphasize risk-focused bank supervision in Nigeria. Similarly, they have developed twenty-five (25) core principles for effective banking supervision as enunciated by the Basle committee on banking supervision as the pivot of the framework for bank supervision.
Presently, the major relevant statutes include Central Bank of Nigeria Decree No 24 of 1991, the Banks and other financial Decree No. 25 of 1991, the Company and Allied Matters Decree No 1 of 1990, the Nigeria Deposit Insurance
Corporation Decree No 22 of 1988 and lately, the failed Bank (recovery of debt & Financial malpractices) Decree No 18 of 1994. These enabling laws and other relevant legislation have largely provided for sufficient and comprehensive supervisory power and operational autonomy in bank supervision, which may restore public confidence in banks. Furthermore, as part of efforts to ensure the stability of the banking industry and in response to the lingering problem of distress in the sub-sector, the supervision authorities have been applying various failure measures since the late 1990s. Hence depending on the severity and peculiarity of the distress, NDIC in collaboration with the CBN, has over the years, successfully adopted such measures as provision of liquidity support through accommodation bill, imposition of prompt corrective actions, assumption control and management, restructuring and sale of some distressed banks as well as liquidation of the terminally distressed banks as a last but unavoidable option.

Bank supervision is implemented to ensure a sound and safe financial system in the economy. The measures are mainly concerned with the quality of risk asset in banks, compliance with key ratios such as liquidity ratio, cash reserve ratio, capital adequacy ratio amongst others, the quality of management and other corporate governance issues. However, inadequate supervisory framework and lack of an effective risk asset database and information sharing system have contributed in no small measure in disrupting the activities of banks, thereby leading to the often distasteful incidents of banking distress and liquidation by the regulators. In line with this problem, various banking acts have been promulgated as well as the introduction of different strategies all aimed at increasing the efficiency of banking supervision. Among them are on-site, off-site banking examination, routine examination, special examinations culled at the instance of the regulators as well as other methods of surveillance to be discussed in subsequent chapters. These measures are mutually reinforcing and are designed to timely identify and diagnose emerging problems in individual banks with a view to presenting most efficient resolution directed towards ensuring continued public confidence in the banking system.
The general aim of this research work is to determine the impact of the supervision on management efficiency in banking sector. The main objectives are:
1. To ascertain the supervision system in banking sector.
2. To ascertain the effectiveness and efficiency of the supervision procedures in the banking sector.
3. To assess the extent at which supervision has so far attained efficiency level in the banking sector for the period under review.
4. To critically evaluate the control aspect of supervision that would ensure effective management efficiency while minimizing waste and misappropriation of funds.

S Since the promulgation of decree No 22 of 1988, the effectiveness of the operations of NDIC and CBN has been a source of controversy and comments by key monitors in the banking industry.
The generated controversy among bankers and the general public forms an integral part of the research questions. These are:
1. What is the supervision system in banking sector?
2. How can effectiveness and efficiency of the supervision procedures in the banking sector be ascertained?
3. To what extent has supervision attained efficiency in the banking sector for the period under review?
4. What is the control aspect of supervision that would ensure effective and efficient management while minimizing waste and misappropriation of funds?

This study will therefore test the following hypotheses.
1. H1: The banking sector has a system of supervision
HO: The banking sector does not have a system of supervision
2. H1: Effectiveness and efficiency of the supervision
procedures in the banking sector can be ascertained. HO: Effectiveness and efficiency of the supervision procedures in the banking sector cannot be ascertained.
3. H1: The control aspect of supervision would ensure
effective and efficient management while minimizing waste and misappropriation of funds HO: The control aspect of supervision would not ensure effective and efficient management while minimizing waste and misappropriation of funds.


This research paper is intended to examine the supervision system in the Banking sector with a view to ascertaining whether it has the potentiality of ensuring efficiency. Therefore, the research paper will be of interest and useful to the general public, the government public officers, the depositors, undergraduate of management and related courses and potential researcher on this area. The depositor is the general masses of citizens, who have been accusing the banks of mismanagement of resources.

It also provides a platform for the supervisory authorities to appreciate the impact of their activities on the banking industry, and underscores areas for improvement. It is also imperative to state that a study of this nature provides an independent platform through which the supervisors can appraise fundamental tools of supervision in a bid to make reasonable adjustments where necessary. The findings of this study will be of immense benefit not only to the Nigerian banking industry and its related institutions, but also to those interested in understanding the inter-relationship between the actions of the supervision on one hand and the banking institutions on the other as well as providing a platform for promoting an efficient and effective banking practice.

For the purpose of this research study, the researcher‟s efforts will be concentrated on the impact of supervision on management efficiency in banking industry using UBA as case study. The research will covered united Bank for Africa (UBA), with specific emphasis on the Okpara Avenue, Agbani road, and Kenyentta branches all in Enugu, Enugu state.


• Time The time given to the researcher to carry out this study was limited as the session was coming to an end.

• Finance The methods used in collecting data for this research was quite expensive. The cost of internet materials, which was the major source of collecting data for this research, has gone so high that the researcher had to get limited materials for the research.

• Attitude of Respondents Respondents were not friendly at all. They were arrogant and rude. There was lack of rapport between the researcher and the respondents so it was difficult to accurate or reliable information. So also, the employees were not willing to divulge relevant information for fear of victimization from the management of the organisation.
United Bank for Africa Plc („UBA‟ or „the Bank‟) is one of Nigeria‟s oldest financial institutions. The Bank was incorporated in Nigeria in 1961 as a limited liability company, and assumed the banking business of the erstwhile British and French Bank Limited, which had been operating in Nigeria since 1949. In 2005, UBA merged with the former Standard Trust Bank Plc and acquired Continental Trust Bank Limited. Thereafter, the Bank acquired six banks under the Central Bank of Nigeria (CBN) „Purchase & Assumption Scheme‟ in 2006. Under the scheme, the Bank purchased certain assets and all the private sector liabilities of six banks namely, Trade Bank Plc, City Express Bank Plc, Afex Bank Plc, Gulf Bank Plc, Metropolitan Bank Ltd and Liberty Bank Plc.
With over 280,000 shareholders, UBA has a large shareholder base comprising Nigerian citizens & associations, as well as foreign institutions based on the disclosure in the annual accounts. UBA Staff Investment Trust scheme and Stanbic IBTC Nominees were the only shareholders controlling over 5% of the Bank‟s shares as at 31 December 2010 as disclosed in the annual accounts. The Bank‟s eighteen member board of directors jointly control (directly & indirectly), 6% of its shares. UBA‟s board comprises nine executive and nine non-executive directors. During the period under review, there were a number of notable changes to the Board. In August 2010, Mr. Tony Elumelu (MFR) stepped down as the Managing Director of UBA, following CBN‟s new regulation mandating a ten-year maximum tenor for banks chief executive officers. He was replaced by Mr. Phillips Oduoza, an erstwhile Deputy Managing Director of the Bank. Three non-executive directors – Mr Willy Kroeger, Alhaji Garba Ruma and Mrs. Rose Okwechime – resigned their appointments from the board. These directors were replaced by Ambassador Joe Keshi, Alhaji Yahya Zekeri and Mrs Angela Nwabuoko who resigned from her position as Executive Director in July 2010. Also during the period, Mr Godwin Ize-lyamu resigned from his positions as an executive director, while Mr Ifeatu Onejeme and Mr Femi Olaloku were appointed executive directors in charge of the UBA‟s Corporate & International Banking and Operations & Technology directorate respectively.
By virtue of its age and geographical spread, UBA has a good domestic franchise with strengths in wholesale, corporate, public sector and retail banking. With 622 operational locations spread across both the metropolitan and rural areas of the country, UBA has one of the largest branch networks in the industry. Apart from Nigeria, the Bank has operations in 20 countries, including Paris, New York and London. As at 31 December 2010, UBA had deployed over 1,083 ATM machines in Nigeria. UBA offers a wide range of financial services encompassing corporate finance, current and deposit accounts, electronic banking, trade finance, foreign exchange and investment banking services. For the creation of risk assets, UBA‟s key growth sectors are telecommunications, infrastructure and most recently the power sector and oil & gas. Over the last year, the Bank financed several multimillion dollar deals in the oil & gas sector, which includes the participation in a US$375 million syndicated loan and a US$540 facility granted to the Nigerian gas to liquid project. Through its subsidiaries and affiliates, the Bank has offers other financial services such as registrarship, trusteeship, custodial services, stock brokering, insurance and asset management.


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