This study is aimed act appraising the liquidity problems in commercial banks in Nigeria with a problem in commercial banks in Nigeria with a view of determining how these problem affects commercial banking business as well as determining whether the policies imposed by the central bank has actually solved the liquidity problem of commercials banks or not. In doing this we want to classify the period under review (1980- 1989) in the Pre-SFEM period and the Post-SFEM period. On other words the study interns to discuss the Pre-SFEM and Post-SFEM experience of banks and offer useful suggestion as how to these problem could be alleviated if not eradicated.
For this purpose an empyreal survey and history research was carried on and the statistical tool used is percentages. The source of data for this study is primary and secondary sources. While the primary source consists of questionnaires and oral interview the secondary source is in the form of books journals and news papers.
The research revealed that prior to the introduction of the structural. Adjustment programme with the second tier foreign exchange (SFEM) as its main feature the structural adjustment programme (SAP) brought about the present liquidity crutch in banking system. It was further found out that both excess liquidity and shortage of liquidity affect the banks loans and advance as well as their profits. Further more it was observed.
That the policies imposed by the central bank have not solved the (excess and shortage ) liquidity problem of commercial banks.
As a result of these it is suggested among others that banks should intensify their efforts towards acquiring more deposit- drive for deposits (as it is popularly know )in order to alleviate the present problem of liquidity shortage in system.
More so there should be effective supervision of the follicles impose by the central bank to combat the liquidity problems of commercial banks to ensure that the policies are adequate implement other measure to alleviate either the excess or shortage of liquidity problem include adjustment of interest rate adjustment interest ratio, diversification of commercial banking service establishment of more rural banks to mobilize rural saving and so on. The essences of these are to maintain adequate liquidity and at the same time to ensure profit for the share holders.
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