Liberalization and Adoption of Universal Banking in Nigeria

Abstract

This study was set out to review the operation of universal banking scheme as part of reforms strategy of banking liberalization in Nigeria. The objectives of the study were to determine the effect of regulatory authorities’ supervision and oversight function on the performance of universal banks, examine the banking sector performance under universal banking system and to determine the justification for adoption of universal banking system in Nigeria. The study employed survey method of research design and the data were from primary source. The research instrument used was questionnaire and Two-way Analysis of Variance (ANOVA) together with Spearman-Rank Order Correlation Coefficient as the statistical tool. Three hypotheses were postulated and tested, hence findings revealed that universal banking enhanced economic growth in Nigeria; that poor supervision and oversight function of regulatory authorities affected operation of universal banking negatively and that there was growth in the banking industry in terms of depth and breadth during the universal banking regime. The study concluded that despite the challenges of universal banking in Nigeria, there is justification for adoption of universal banking in Nigeria considering its impact on the economic growth and development especially in the banking sector.