We all know what banks are, but for definitions sakes, a bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. Simply put, a bank is a connection between customers that have capital deficits and customers with capital surpluses.
Types of Banks in Nigeria
The only types of banks which are permitted to carry on business in Nigeria as contemplated under BOFIA are;
- Commercial Banks;
- Merchant banks; and
- Specialized Banks, which include non-interest Banks, Microfinance Banks, Development Banks, and Mortgage Banks.
1. Understand the financial sector
The financial services sector is quite a complicated one and the reason is that it is a knowledge-driven industry. You need a high financial IQ to understand the modus operandi of the banking industry and financial services sector at large. To operate in the banking sector, you must have a first-hand idea of how the financial services industry works. You must know and understand the various indexes, terminologies, and principles of banking.
Read Also: The History of Banking in Nigeria
2. Decide On the Type of Bank You Want To Start
As earlier stated there are various categories of banks available to you to choose from. There is a commercial bank, microfinance bank, and community bank. These banks have different requirements for obtaining a license. So before you make up your mind to start a bank, know exactly what you want and then go for it.
It is also important to note that you can choose a niche for your bank based on the area of need you intend servicing. You could choose to start an investment bank, retail bank, business bank, mortgage bank, private or corporate banking.
3. Obtain Your License
Haven fulfilled all the expected conditions; the next step is to approach the Central Bank of your country to obtain your license. It might take you a while before you are granted the license to operate a banking institution. This is so because they would definitely carry out their due diligence to be sure that they are dealing with someone the public can trust.
4. Register Your Bank
If you have obtained your license, the next thing to do is to go ahead and register your bank. When you go to the Corporate Affairs Commission of your country to register your bank, you would definitely be required to present the license you obtained from the Central Bank and all other needed documents.
5. Get Your Facility / Facilities
You are expected to get a facility that can easily be accessed by the general public. So when searching for facilities to lease you must make sure you chose a location that is close to a major road or market where people won’t have to stress themselves to get to you.
You should also ensure that the facility you are leasing is well secured and meets all safety standards. It is also advisable to establish your bank in an unbanked community if you want to avoid competitions and if you are ready to face some of the challenges common with such locations.
6. Market and Advertise Your Bank
What keeps the banking industry growing is the innovation and products they have to offer. Starting and running a bank requires aggressive marketing. Little wonder those in the marketing unit in the banking industry are the type of employees that are easily promoted when they meet and surpass their targets.
So to stay afloat in the banking industry, you must be ready to spend good cash in advertising and promoting your bank. Your marketing and advertising departments must come out with new innovations and products that can catch the attention of your potential clients.