Branch banking is the type of banking system prevalent in
Nigeria. It is a system bequeathed to the country by thee British
financial system having been its colony before. Nigeria banks have
Head Offices either in Lagos or Abuja or the state capital of the
owner government (where State banks still exist). Branches are
spread throughout the country. The number of branches help the
banks to mobilise deposits and make loans and enables optimal
liquidity management. While unit banking in the US is basically as
a result of State Banking Commissions powers to issues charters to
banks within their territory. The controller of currency issues
charters to national banks (those banks that can spread
nationally), while the Central Bank of Nigeria issues the single
license to operating banks in the country though permits are
required when banks open new branches.
The variant of unit banking that exist in Nigeria is that of the
erstwhile community banks that have now transformed into Micro
finance banks. Even then the Micro finance banks can now expand
across the states if they can have increased capital base ten times
the single unit. Just as unit banking is fading and becoming
anachronistic in the US, the micro finance banks have opportunity
to expand if they are interested and can afford it. Unit banks
system is costly to run.
