Challenges of National Bank Directives on Forex Utilization of Private Commercial Banks
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Date
2019-06
Authors
Dereje, Shiferaw
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
The aim of the study was to identify the challenges of Private Banks’ Forex utilization due to NBE Directives. NBE is the responsible organ to supervise financial institutions like Banks. There are 16 Private Commercial Banks operating in Ethiopia. Private Banks have been playing an important role in the Country’s overall development. But some directives issued by NBE have been seen as a challenge for these Banks to foster their progress as they deemed. The study revealed that the directives issued by NBE have a negative impact on Forex utilization of Private Banks and discouraged Banks to achieve their goals in a specified period of time. Though NBE requirements or directives are not the sole reasons, most Bank professionals believe that these directives have an impact on their progress. Regarding the methods of the study, both quantitative and qualitative research methods were applied to identify the real challenges of Private Banks. The study covered six pioneers Private Banks branches found in Addis Ababa as per the date of establishment. A total of 87 IB Managers/Heads and Officers participated in the study. A combination of primary and secondary data had been taken for the study. Some secondary sources like directives and annual reports were used to supplement the study. Semi-structured interview randomly selected participants was carried out. The data analyzed conducted through a mixture of exploratory and descriptive research design. It adapted a survey approach with the use of questionnaires designed to elicit opinions about the real challenges of NBE Directives on Forex utilization of Private Banks from IB Managers/Heads and Officers point of view. To analyze the quantitative data, descriptive statistics was applied. The result of the study showed that some directives issued in connection with FCY have an impact on the overall performance of these Banks. Although some directives have been revised, the impact remains the same as the previous ones. The study identified real factors which challenges the Forex utilization of Private Banks. The findings suggested that some directives should be revised.
Description
A Thesis Submitted to the School of Graduate Studies of Addis Ababa University College of Business and Economics Department of Management in Partial Fulfillment of the Requirement for the Degree of Masters in Management
Keywords
Challenges, Private Commercial Banks, Directives