Firstly, since independence in 1960, the Nigerian political system has been unstable, there have been 7 military coups, which has made the investment climate unattractive because the nation seems unsafe for the foreign investor. Second, there are too many arbitrary and sudden changes in government policies and regulations that have led to a lot of uncertainty. Foreign banks are afraid to finance any project with a long gestation period. Faced with this fear, most of these banks are now turning to large treasury centers, that is to say they mainly deal with deposits and disbursements of funds without getting involved in project financing. in the long term. Third, corruption is endemic and has spread to all facets of the sector. economy. It is widely used in many governments and public agencies and foreign banks believe that business operations may grind to a halt if they are not “greased”. Another major finding is that of the weakness of the legal system, the legal system also had its deficit resulting from the interference of the executive in their affairs. Those who have broken laws are not easily brought to justice, those involved in fraudulent business practices or breaching contractual agreements are not properly prosecuted to deter others. Based on this, most foreign banks tend to be concerned about the validity and enforcement of contractual agreements. Foreign banks need a healthy private sector, capable of obtaining a reasonable rate of return in a stable economic environment, i.e. when the private sector is healthy, this is a good indicator for the foreign investor that the economy is stable, prosperous and can constitute a good investment opportunity. The government is too involved in regulatory approvals. None is even left in the hands of the private sector through organized bodies, as is the case in the United Kingdom through the Financial Service Authority (FSA). The FSA regulates both the prudential aspect and the conduct of business. It is financed by an industrial levy and is managed by a supervisory board. This supervisory board is mainly made up of people from the financial sector, not necessarily from the Llewellyn government (2000).5.2 CONCLUSIONFor an economy to measure up to international standards, there must be the presence of some foreign banks, the Nigerian economy witnessed such a presence. However, a number of these banks tend to vary from time to time and from region to region. Research analysis highlighted challenges facing foreign banks in Nigeria..