CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Financial institutions are business that gives service for instance checking. It is also regulated by the international laws by as they are operational in more than one country. The share holder or the owners of the financial institutions are the national government of the countries. Financial institution get into conflicting situation very easily due to various international laws and it is widely believe that structural and political concern of the country causes obstacle to the development of the appraising the roles of financial institution. This is caused mainly due to the international humanitarian laws on the other hand, it is also believed that the financial institution in the community help them to make contribution to the enforcement and implementation of the humanitarian law.
The involvement of the financial institution in humanitarian law can be helpful to the united nation in supporting its effort to prevent violation of the humanitarian laws. It is also to enforce the law against those who are suspected of community atrocities. The International Monetary Fund (IMF) and world bank are the specialized financial agencies of the United Nation that function as independent international organization their functionalities are not bound by the insecurity country resolution. Financial institutions seek to take risk and uncertainty which they resist on their own, but unless the financial institution extend credit to encourage private investment in modern fixed and working capital requirement for new biological and other natural resources for shifting production function upward cannot be fulfilled although there is a financial mismanagement in the developing country of financial system.