INTRODUCTION

1.1 STATEMENT OF PROBLEMS

Investigation are been carry out in this project, central bank of Nigeria is a financial institution establishment by the law (Act of parliament) vested with power of promoting monetary stability sound financial system by issuing legal tended currency, maintain the value of domestic currency etc. CBN source of funds were form share capital, general reserve, currency in circulation deposit by federal government (FG) deposits by the sate government and deposit by banking industries etc.

Central bank of Nigeria (CBN) is supposed to contribute to the economy development of a Nigeria in the following ways. Such contribution done by CBN were issuing of currency notes, funding agriculture sector, funding banking industries, prevention of bank crisis etc. Also CBN is suppose to contribute to economic growth through monetary policy in the economy such as bank rate, open market operation (OMO) legal reserve ratio, special deposit and moral suasion etc. CBN have constitute economy growth by using money market instrument like treasury certificate, banker unit find etc.

In this project the area I want to work on is monetary policy. The aspect to study is bank industries that CBN had aid to growth and development.

1.2   RATIONALE OF STUDY

In this project, the rationale of study will involves in the aspect area which the central bank of Nigeria aid economic growth and development of banking industries in Nigeria. This can be carry out in the following ways.

1. To find out whether CBN only financial institution authorial to issued currency and distribution within the banking industries.

2. To know, if CBN uses monetary policy to control activities of other banks within the banking industries.

3. To find out how CBN will supervision of finance Houses within the economic growth and development of banking industries in Nigeria.

1.3   SIGNIFICANCE OF STUDY

The importance of this project will enhance the following in the economic growth and development of Nigeria through the following ways.

1. This project, will make commercial banks, other financial institution to understand berried facing why customers are not  operating in their bank.

2. This research project work will enable federal government to take active participation in the banking system.

3. This project work, will help the private and public company to known need of money market in order to aid economic large scales.

4. This research work will enable banker to known minimum and maximum amount of money that their customer aspect to deposit within the bank.

5. This project work will also help students both national diploma and higher national diploma who studies banking and finance as a course acquired knowledge on their course of studies.

6. This written work in this project, will motivate central bank of Nigeria’s staffs to work actively in order to promote sound financial system of the central bank of Nigeria can engaged in growth and development in economy system in Nigeria. This would help to establish maintain and improve lines of communication a bank and its public are aware and understand a banking system can be hope for with room still for the improvement in economy system in Nigeria

1.4   DEFINITION OF TERMS

In order to make this work a bit clear certain terms will be defined

1) BANK:  Any person who carries on banking business and includes all the financial institution such as commercial bank mortgage bank on acceptance house and discount house etc.

2) MONETARY POLICY: It is an instrument used by central bank to control inflow and outflow of money in the Nigeria economy.

3) MONEY MARKET: This is a market for borrowing and lending short, medium term loan or funds.

4) OPEN MARKET OPERATION: This weapon involves the sale and purchase of securities, bills bonds, and government securities by the CBN

5) LEGAL RESERVES RATIO: This is minimum percentage of deposit that commercial bank is required by law to deposits with the CBN.

6) CREDIT GUIDELINES: This is a prescribed guidelines both with regard to the amount of loan and advance on commercial and merchant bank.