THE EFFECT OF GOVERNMENT INTERFERENCE IN MANAGEMENT OF FINANCIAL INSTITUTION (A CASE STUDY OF UNION BANK OF NIGERIA PLC)

ABSTRACTS
The research work is based on the effective of government interference in management of financial institution. In this study it has been revealed that this interference on financial institution by government as a whole is a noble in the right direct. This Niger financial system is very vibrant and highly competitive they have four basic product lines in the banking industry such as deposit base product, lending base product, fee base product, and technology base product. The government interference in the management of financial institution is the project a case study of Union Bank of Nigeria Plc. Is an important aspect of financial institution, its domain is to ensure the regulation of money by the financial institution. So to identify those problems encountered you must ensure that good services are appropriately at the right time and place. The objective of this study has been to determine how much government interference and the management of financial institution has gone in improving the banking system and habits of union bank Nigeria PLC, also the researcher examine the role of government in regulating banking activities. Though. This has not been reduce and completely eradicated in other like union bank, capable and better. Financial institution cannot stay out of danger and crises without some measure of adaptation of the regulation and policies will help them to be more efficient and effective in their operations. It also promotes banking habits and efficiency in the delivery of banking service and thereby enhances confidence in the system. Finally, therefore it can be asserted that there are laudable changes seen in our bank today of which could not be possible if government did not come into their management.

INTRODUCTION
Management has been defined as the process of combining and utilizing organization resource of managerial to accomplish organization objectives. It is also a process entailing responsibility for effective planning and regulation of operation in an enterprise in fulfillment of a given purpose or task.
What then do we actually means by interference? Interference according to Webster’s dictionary is to take an active but unwelcome part in some else activity.
In this study it has been revealed that this interference on financial institution by government as a whole is a noble in the right direct. This Niger financial system is very vibrant and highly competitive they have four basic product lines in the banking industry such as deposit base product, lending base product, fee base product, and technology base product. This was instituted by the observation during the research that financial institution benefited immensely by the government on the financial institution.

It is well known fact that number of service of financial institutions offers have increased by taking a fundamental nature of their business and it remains unchanged. This has led to conclusion that management in financial institution is surrounded with risk. Management which involves mismatches of assets and liabilities and it is cost borrowing and lending on the other side. To nurture the economy is to loan the part of development that has been the role of financial institution, mostly banks which has been constrained by number of facts in to the past price.
Now the industrial sector has been characterize by massive government involvement because of weak technolocal base, lack of linkages in infrastructure and policy investment highly production cost and goods that were uncompetitive internationally. Over the entire micro economic environment was highly unstable, witnessing capital fight, high interest or inflation rates negative real growth rates and fiscal excesses. With an external debt burden of about 27.46 at the end of 1997, the repayment burden put constraint on growth. Since 1995, however the federal government has been able to store some measure of fiscal discipline through low budget deficits which achieved stable interest and exchange rates regimes while pushing down inflation to a simple digit of 8.5 percent in 1998.

Aggressive reform and sanitation of the financial institution source were pursued. On the other hand little or no attention was paid to the vital area of privatization of government utilities liberalization of the economic and improvement of infrastructure. The above review of the economy has been undertaken and other financial institutions were supposed to operate and provide financial to the industrial sector. Therefore, form the above review the researcher wants to use this study to explore those factors emanated from government interference in the management of financial institutions that inhibited them from effective discharging, their responsibility to the economy generally using the rules and regulation of Union bank PLC to determine the extent it has contributed both positively and negative part of such interference in the institution.

1.1 BACKGROUND OF THE STUDY
The Nigeria institution is very vibrant and highly competitive. It consist of 105 viable commercial and merchant banks which are privately owned with a total of 2, 400 branches and development bank such as NBC, NIDB, PBN AND FMSN owned by the government. There are about 200 registered non bank finance houses of various sizes, part of the structural adjustment programme (SAP) introduced in 1986. This was the expansion and diffusion of the banking sector which has grown to 67 commercial and 55 merchant banks then 45 primary mortagage institution 228 branched of the people bank, 618 finance companies, 48 fully licensed by the CBN, 401 community banks and specialized bank by this null 1990’s there was endemic distress in financial system which led to collapse of many of the institutions in the industry.

Many commercial and merchant bank were liquidated with 26 banks (13 each for commercial and merchant) liquidated as recently as January 16, 1989. In this case Union bank of Nigeria PLC Enugu revealed that government interference in management of positive type. Even though that there are some risk in embodying such rules and regulations line is their banking system such as deposit based on product lending base, product fee base, products and technology base.
Therefore the interference has help to accept the risk job of greater mobilization of saving from the surplus units and channel them to the deficit productive units of the economy and to ensure that no unable project is frustrated due to lack of funds and greater facilitation of synergies and sartorial linkages within the economy. There are still problem resulting in such interference of which union bank are complaining of.

The effect of government interference in the management of union bank plc also covers limits of permissible business risk concentration capital and liquidity adequacy and statutory returns. The monetary aspect of regulatory includes control of over loading general structure of leading rates reserve requirement and foreign exchange. There are also regulation covering advertising staff loan. Loan directors and inside dealing supervision is employed to ensure effective management and control. The criticism led to gradual deregulation in 1984 and was subsequently accelerated with the adoption of (SAP) programme which gives room for the operation of free market forces given financial instructions and more direction to their operation and stimulation competitions in the financial system as a whole.
Consequently in 1988 the Nigeria deposit insurance corporation was established with regulatory power to protect depositors against bank failure and thereby strength the financial and impacted greatly on financial institution environment.