The role and functions of the banking system in driving financial
inclusion/intermediation in a modern economic system cannot be
overemphasized. According to Fakhrul-Ahsan (1998) and Usman (2003) the
banking system is often considered as the heart of every prosperous economy.
This is pertinent to its financial intermediation role in enhancing economic
growth and development. An appraisal of history reveals that the banking
system is among the most imperative aspects of any thriving economy and
financial system.
In the modern economy, the contribution of the banking system in performing the role of financial
inclusion/intermediation, couldn’t be exaggerated. The banking system is an integral part of any
prosperous economy, Fakhrul-Ahsan (1998) and Usman (2003).
Fakhrul-Ahsan, A. S. M. (1998). Islamic banking in perspective: Concepts and Practices. Kano: Tofa
Commercial Press Ltd.
Usman, S. (2003). The legal and regulatory issues of Islamic banking in Nigeria, in Suleiman, S. and
Galadanchi, B.(ed), General Framework and Case Studies: Kano, International Institute of Islamic
Thought (IIIT).
Being the heart of a wealthy economy, the financial intermediatory role of the banking system plays
an important part in strengthening economic growth and development. An assessment of history
discloses that the banking system is among the most essential aspect of any prospering economy.
Banks facilitate the transfer of resources Islamic (non interest) banking is just
like any of the existing bank techniques found in specialized settings such as
microfinance, mortgage, and development banks among others. An individual
could only participate based on his volition.
Transfer of resources are begin facilitated through banking channels, Islamic banking (non-interest-
based banking) is just like other existing banking manners and processes, set up in appropriate
settings i.e., mortgage, microfinance, and development banks among others. An independent would
only participate with his consent.
The normative approach to the role of banks suggests that banks meet the
expectation of the banking public (Ezirim, 2005). The intermediation functions
of banks in a dynamic and vulnerable environment subject the institution to
various categories of risk such as credit risk, liquidity risk, operational risk,
interest rate risk, credit risk, market risk and other types of risks that can
threaten the solvency, operational efficiency and survival of the institutions.
This necessitated prudential regulation and control such as Basel Accord,
prudential guideline, monetary policy guidelines and the management to
formulate measures to manage the uncertainties inherent in the operating
business environments.
The regularized and standardized approach of the banking system suggests that banks tend to meet
the presupposition of the banking public (Ezirim, 2005).
Ezirim, B. C. (2005). Finance dynamics: principles, applications and techniques. Markowitz Centre for
Research and Development. Port Harcourt.