ASSESSING THE ROLE OF DEPOSITORS IN PREVENTING BANK FAILURES IN NIGERIA: A STUDY OF THE DEPOSITORS IN THE NORTH EASTERN STATES

Abstract

Bank failures have been a recurring decimal over the
years in Nigeria. The failures had serious implications for
the financial sector and by extension the economy. Most
often, it is the Central Bank/Deposit Insurance
Corporation that are saddled with the responsibility of
regulating and supervising the banks so as to prevent
bank failures. But preventing bank failures is all
encompassing (depositors are key players) with every key
player involved and important. Thus, the objective of the
study is to examine depositor’s role(s) in preventing bank
failures. Questionnaire survey method was used for this
study. The questionnaire was administered on bank
customers across the North East Zone of Nigeria
comprising the following States; Adamawa, Bauchi,
Borno, Gombe, Taraba and Yobe. The findings showed
that Bank Depositors in the Zone; do not monitor the
activities of their banks, are not financially literate, banks
activities are not or clearly disclosed by banks. The fact is
that customer’s knowledge of banks activities is itself a
ILIMI JOURNAL OF ARTS AND SOCIAL SCIENCES (IJASS) Volume 4 No.1, November/December, 2019.
Assessing the role of Depositors in Preventing Bank Failures in
Nigeria: A Study of the Depositors in the North Eastern States
49
check on how banks undertake their activities. It is
recommended therefore that financial literacy,
information disclosure by banks and customer awareness
campaign should be key to arouse awareness of bank
depositors on the activities of their banks and how they
could checkmate the activities of the banks to be up and
doing in their business and thus minimizing bank failures.
This is apparently important in Nigeria where banks
failures have overtime become one too many.