The
banking system is a catalyst and engine of growth that is responsible for being
a life wire to every sector of the economy. It is evident that no sector in the
economy can flourish or prosper without the support and services of the banking
sector, agricultural sector, manufacturing sector, mining or even services
sector can’t do without banks. Commercial banks provide and encourage savings.
The establishment of commercial bank especially in the rural areas makes
savings possible, hence economic development is accelerated.

Commercial
banks provide capital needed for development. Deficit spender unit obtain
medium and short term loans and overdraft from commercial banks to start a new
industry or to engage in other development efforts. They engage in trade
activities through making use of cheques and other financial instrument
possible. They encourage investment, provide direct loans to the government and
individuals for investment purposes. They provide managerial advices to
small-scale industrialists who do not engage in the service of specialist.
Commercial banks also render financial advice to their customers including to
invest in. Commercial banks create money as an instrument to the apex bank for
all its activities. Commercial banks help to enhance development of
international trade, these include acting as referees to importers, providing
travellers cheque to those going abroad, opening letters of credit as well as
providing credit for export. All these helps to promote international trade and
relationship between nations, they provide backup liquidity to the economy.
They are transmitters of monetary policy and they provide some “value added”
from transfering funds from savers to borrowers and providing liquidity.

The
current credit crisis and the transatlantic mortage financial turmoil have
questioned effectiveness of banks consolidation programme as a remedy for
financial stabilty and monetary policy in correcting the defects in the
financial sector for sustainable development. The consolidation of banks has
been the major policy instrument being adopted in correcting deficiencies in
the financial sector. The economic rationale for the domestic consolidation is
indisputable, an early view of consolidation was that it makes banking more
cost efficient because larger banks can eliminate excess capacity in areas like
data processing, personnel marketing or overlapping networks. Cost efficiency
also could increase if more efficient banks acquired less efficient ones.
Consolidation is viewed as the reduction in the number of banks and other
deposit taking institutions with a simultaneous increase in size and
concentration of the consolidation entities in the sector. The driving forces
in bank consolidation include better risk control through the creation of
critical mass and economies of scale, advancement of marketing and product
initiative improvements in the overall credit risk and technology exploitation.
These drivers has lead to improved operational efficiencies and larger and
better capitalized institutions.

1.3
STATEMENT OF THE PROBLEM

Given
that the economic trend of the commercial banking industry, one wondered what
has hindered economic growth, though an important avenue for banks to boost the
growth of the economy through efficient and effective saving investment
process(financial intermediation) to stimulate investment and productive activities.

For
the past three decades, the Nigerian economy has not shown any favourable sign
of growth. For example, the real GNP growth rate figure was 2.8% in 1995 with
negative figures in years like 1982, 0.3% etc as depicted in the CBN periodic
bulletin in 1986. This shows that the Nigerian economy is not one that can
inspire confidence, if no drastic improvement is shown by financial
institutions with its economy especially in the new millenium.

1.In
what extent does commercial bank as a financial intermediate contribute towards
fund mobilization for economic growth and development of the country.

2.What
is the essence of commercial banks in Nigerian economy towards fund
mobilization for economic growth and development?

3.What
are the problems commercial banks encounter in their performance towards
mobilization of funds for economic growth and development?

1.4  OBJECTIVES OF THE STUDY

The
objectives of this research work are tacitly stated as follows.

-To
determine the contribution of commercial banks towards a positive economic
growth and wealth creation in Etsako west L.G.A. Edo state    

-To
examine ways in which the commercial banks in Nigeria can be made to play
better roles towards fund mobilization for economic growth and development.

-To
analyse the constraints and short comings facing commercial banks in Nigeria
towards fund mobilization for economic growth and development.

-To
determine and test the effects of some relevant economic variable and factors
on the real gross domestic product (GDP) of Nigeria.

1.5  STATEMENT OF THE HYPOTHESIS

This research work
will be guided by the following hypothesis.

Commercial banks do
not contribute significantly towards fund mobilization for economic growth and
development of the country.

The variables of commercial
banks are lending deposits, real investment and interest rate etc do not have
any impact in the Nigerian economic sector.

The constraints on
the activities of the comercial bank do not affect their economic role and
activities.

1.6
SIGNIFICANCE OF THE STUDY