The aim of this research study is to identify the effect of insurance industry in promoting banking services in Nigeria. (A study of Skye Bank Enugu Metropolis). The objectives of this research work is to examine and analyze the success of banking business in Nigeria and the roles insurance sector play in promoting their services and also to identify the various problems and challenges facing Nigeria banks. The Related literature review of this work include; The historical background of skye bank Nigeria . For a successful completion of this research work, the researcher made use of both primary and secondary methods of data collection of information gathering. Primary data were collected through questionnaire, administration, oral interview, and personal observations. Secondary data were collected through journals, textbooks, lectures, notebooks  and internet. The data collected were presented in table and analyzed with simple percentage while the hypothesis stated were tested with chi-square. The summary of findings made by the researcher include the following: it was discovered that  insurance industry has positively influenced the services of Nigeria banking industry. In conclusion, the future and success of Nigeria banks lies mainly in the hands of insurance industry; therefore, Nigeria banks needs insurance industry to survive. The researcher recommends that Nigeria government should support the activities of insurance industry in order to boost the effectiveness of Nigeria banking services.




         Nigeria as a developing country has been grappling with the realities of development process, not only politically and socially but also economically. Since economic development is perceived as a multi-dimensional process, it requires not only capital and technology but also attitude and the creation of the institutional structures. It also includes special protection of the financial institutions.

          The banking system has thus been singled out for this special protection because of the vital roles banks play in an economy especially in the process of economic development. According to C. Arthur Williams jr (1992), the establishment of insurance protection and cover through Nigeria Deposit Insurance Corporation (NDIC) was informed by economic circumstances and by a number of other considerations. The economic circumstances involved the new economic policy of government, the bitter experience of prior bank failures in Nigeria and the lessons from other countries with bank deposit insurance scheme.

          The distress in the banking system often precipitate other crises and this has necessitated regulatory and supervisory authorities to take a series of actions and intervention in response to these problems.

The emergency of Nigeria Deposit Insurance corporation into financial sector of the Nigeria economy was borne out of necessity and need to check the incessant rise and fall of indigenous banks, Thus, the objectives of the Nigeria Deposit Insurance corporation are to protect bank depositors, ensure stability in the industry, encourage healthy competition among banks at foster, informed risk taking by insured institution, grant financial assistance to banks experiencing difficulties among others.

Insurance industry also stand as a risk transfer mechanism that can also provide cover and protection to some certain uncertainties that can negatively affect Nigeria banking services. According to J.O Irukwu (1999), Insurance cover risks like:

Loss of building and contents to fire and special perils

Loss of cash-in-transit and cash-in-safe

Loss or break down of computers and other business machines

Loss due to infidelity of employees

Loss due to bad debts

Theft in the business premises

Loss of key employees

Loss due to professional negligence

          The researcher in this research work was prompted by the curiosity to know the challenges facing Nigeria banking and how much insurance industry has contributed to tackle and solve those challenges.

1.2                   STATEMENT OF PROBLEMS.

The under listed problems are what led to this research:

1.                 Liquidation of banks

2.                 Weakness of internal control

3.                 Inconsistency in monetary and banking policy

4.                 Fraudulent and unprofessional  conduct of bank staff, depositors and customers

1.3                  OBJECTIVES OF THE STUDY

1.     To determine the effect of insurance industry on bank liquidation in Nigeria.

2.     To evaluate the extent of weakness of internal control system in Nigerian banking industry.

3.     To examine the impact of inconsistency in monetary and banking policy.