Nigeria witnessed a serious economic and financial crisis in the early 1980`s which was a fall out of mismanagement and global shocks. Therefore it was apparent that substantial economic reforms must take place in order to correct the prevailing macroeconomic and structural imbalances. This paper attempts to review some of the economic policies that characterized the era. The study appraised the effects of economic deregulation on the development of the banking industry in Nigeria as against the excessive regulation that characterized the industry prior to 1986. It determined the extent to which economic deregulation had influenced deposit mobilization by banks in Nigeria. It also determined the rate of growth of banks in the banking industry during the deregulation era. In carrying out the study, Averages was used to check the possible economic effects of the following economic indicators Bank Growth Rate (GR) , Interest Rate (R), Exchange Rate (ER), Bank Credits (BC), Deposit Liabilities (DL) and Inflation Rate (IR ) on the economy during regulation and deregulation period in Nigeria from 1970 – 1985 and 1986 – 2001. The results of our findings show a higher bank growth Rate during the regulation period than the deregulation period. Interest Rate was lower during the regulation period than the deregulation era. Exchange Rate of the naira was also observed to be lower during the regulation period than the deregulation period. For Deposit liabilities, the trend changed, as there were more deposit liabilities during the deregulation period than the regulation period. Inflation Rate was higher during deregulation period than regulation period. Bank Credits was observed to be higher during deregulation period than regulation period. Finally, our five recommendations were made based on our findings.

KEYWORDS: deregulation, Interest Rate , Exchange Rate , Bank Credits , Deposit Liabilities and Inflation Rate