ABSTRACT
In recent times, many banks appear to have abandoned their essential intermediation role of mobilizing savings and inculcating banking habit at the householdand micro enterprise levels. The apathy of banks towards small saver particularly at the grass-root level has not only compounded the problems. of law domestic savings and high bank lending rates in the country. It has also reduced access to relatively cheap and stable funds that could provide a reliable source of credit to the productive sector at affordable rates of interest. One of the recent development in the banking system, which is of great concern to the monetary authorities, is the significant dependence of many Nigerian banks on government deposits. The implication of this is that the resource base of such banks is weak and volatile, rendering their operations highly vulnerable to swings in government revenue arising from the uncertainties of the international oil market. The fundamental problems of the banks have been identified to include persistent illiquidity, poor assets quality and unprofitable operations. In view of the foregoing the government in 2001 introduced several bank reforms in order to strengthen the financial system and restore public . confidence in the banking sector. The impact of these banking sector reforms on the Nigerian economy was examined in this study. Both quantitative and qualitative methods of data collection were employed. A public perception and assessment of the bank reforms was also carried out using questionnaire. Respondents to the questionnaire were selected randomly from Guaranty Trust Banks PIc. This was done in order to underscore the relevance of the results generally. 'Findings indicated that there was significant improvement in the key indicators' of financial stability since the introduction of the reforms. Also findings from social survey indicated a significant relationship between banking sector reforms and efficient and stable financial system. From the findings of this study a consolidation of the banks have significantly restored efficiency and stability in the financial system.
