CHAPTER ONE
1.1    GENERAL READING
    The banking system in nigeria started many years ago commercial banking activities started in Nigeria in 1892.
    However, in other to promote the growth of domestic money and capital market and central bank of Nigeria was established by the central bank of Nigeria act of 1958.
    One of the principal objectives of central bank of Nigeria is to promote monetary stability and sundry in the financial system.
    Over the years the central bank of Nigeria as conducted regular supervision and examination of banks as a means of maintaining close watch on banking corporation to ensure that banks comply with banking laws and other directive stipulated by the monetary authorities. This help to promote high leveled quality banking services are maintained.
    The central bank of Nigeria took over the entire functions of banking supervision and examination in January 1966, and on the awareness that adequate and proper supervision demanded and specialized institution that would bring together an experienced team of banks and other related professionals to facilitate the functions of bank supervision.
1.2    STATEMENT OF THE PROBLEM
    It has been revealed from experience that banks face the following problem.
a.    Poor management to establish sounds leading policies as adequate credit administration procedures many banks today also faced the problem of bad debts due to the fact that most of the borrower are getting into difficulty.
Similarly, there are problems of financial distress as a result of multiple contration of money supply by banks in the economy.
b.    Lost of depositor’s fund as a result of failure in proper credit control and management in their lending functions. As a result of these, many of the bank customers have decided to keep their money inform of asset and at the same time they are not encouraged in banking system.
1.3    SIGNIFICANCE OF THE STUDY
    This study is very important for the education of banking industry for the benefit of economic growth, ad development. In Nigeria today. The banking system should not be neglected without making reference to the development of the system.
    This study is condisidering the fact that the banking system of this nation should be enlightened and educated so they can have the privilege to improve the banking operation.
    It is with this intention that the study is to highlight the causesof banking supervision and examination so that the nation will no longer experience banking distress any more.
1.4    OBJECTIVE OF THE STUDY
    In Nigeria today, banking system has recorded a remarkable evolution since the central bank of Nigeria commenced operations.
    However the need for the study is to examine the problem that may likely caused by the banking failure in the process of loss depositors fend the failure of other banking and financial distress as a result of multiple contraction? Of money supply.
    This study also aims at awakeing the banking agencies for proper management of banking activities. Also includes to evaluate a bank loan portfolio, and intern control system.
1.5    DEFINITION OF TERMS
Bank: according to advance learner’s dictionary of current English, a bank is an establishment for keeping money and valuable safely the money being paid out on the customer’s order (advance learner).
Commercial bank: These can be defined as a financial institution set up for keeping and lending money to people, owned by individual, organization or government for the main purpose of making profit (Ebeloku. A).
Central Bank: According to CBN brief research department as the central monetary authority or an apex financial institution within the entire financial structure, which promote monetary stability and a sound financial system (Ebeloku A).
Supervise: this simply means to watch and direct work, workers and organization (Mohammed. A.S)