Abstract

The discipline of finance has come a long way and has witnessed much transformation in recent years. However, it means different things to different people. What is of paramount importance however is the fact that regardless of the perspective in which one chooses to view finance, its underlying fact is that finance deals with money; its generation and application, whether at the individual, corporate or governmental level1. The main institution saddled with the responsibility of finance management is the bank. The word ‘bank’ is not defined in the constitution or in the Interpretation Act. However, in its ordinary grammatical meaning, it means an organisation or place that provides financial service2. In other words, a bank is a financial establishment for the deposit, loan, exchange or issue of money and for transmission of funds3. Sections 2(1) and 66 of the Banks and Other Financial Institutions Act (BOFIA).4 defined a bank as an incorporated company, licensed pursuant to the Act to transact “banking business” under the Act. Universally, banks function as financial intermediaries between savers and the ultimate users, the households and firms. Thus banks gather money from the surplus in the society and re-distribute to the needy. Beside this, banks offer a number of other services such as safe deposits, cheque facilities, easy transfers, overdrafts, guarantees and agency functions in respect of purchase and sale, payment and receipt management and promotion etc. The term banking cannot be easily compartmentalized. In other words, the term defies positive and readily identifiable definition. It must be remembered that a recital of usual characteristics is not equivalent to a definition. The usual characteristics are not the sole characteristics. The business of banking as defined by law and custom consists of the issue of notes payable on demand intended to circulate as money when the banks are banks of issue, in receiving deposits payable on demand in discounting commercial paper; making loans of money on collateral security; buying and selling bills of exchange; negotiating loans, and dealing in negotiable securities issued by the government, state and national and municipal and other corporations.