CHAPTER ONE
1.0
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
Before
the emergence of modern banking system, banking operation was manually done
which lead to a slowdown in settlement of transactions. This manual system
involves posting transactions from one ledger to another which human handles.
Figures or counting of money which should be done through computers or
electronic machine were computed and counted manually which were not 100%
accurate thereby resulting to human errors. Most bank then use only one
computer in carrying out transactions which ameliorate the sluggish nature of
banking transaction.
According
to Clive, W. (2007, p.5) in his Academic dictionary of banking, electronic
banking is defined as a form of banking in which funds are transferred through
an exchange of electronic signals between financial institutions, rather than
an exchange of cash, cheques or other negotiable instruments. According to
Omotayo, G. (2007, p.3) defines electronic banking as a system in which funds
are moved between different accounts using computerized online/real time
systems without the use of written cheques. According to Edet, O. (2008, p.1)
in international Journal of investment and finance, electronic banking is
defined as a system by which transactions are settled electronically with the
use of electronic gadgets such as ATMs, POS terminals, GSM phones, and V-cards
e.t.c. handled by e-holders, bank customers, and stake holders.
In
the Nigerian monetary system, the Central Bank of Nigeria (CBN) is pursuing the
cashless banking system that would see the co-existence of cash and electronic
money and the policy document on cashless economy detailed out the following
implications:
Reduction in
cash transactions to both the banks and their customers: it does not allow
going about with cash but improve online transaction.
Expansion in
vault cash:
Expansion in the
credit creation process: it make credit easy and available through online
access and it does not involve to much cash in hand but bank transfer.
Expansion in the
involvement of the informal sector in the banking process. CBN (2011)
These
implications follow directly from the surface of the policy but there is the
need for a deeper and economic analysis of the introduction of the cashless
banking or cashless economic paradigm and its attendant implications as far as
the attainment of advanced economic objectives are concerned.
1.2 STATEMENT OF PROBLEMS
There
is delay in payment of cheques which lead to the adoption of electronic banking
system. Adoption of electronic banking which suppose to ease banking
transactions rather resulted to woes to customer. Most people complain of time
wasted in banks. This occurs when there is network failure in banks resulting
to slow down in operation.
Investing
in electronic banking, the country will need a large amount of financial
resources in computer technology, obviously, the resource is in short supply in
Nigeria, coupled with high level of poverty. For an efficient functioning of
electronic payment system, there must be availability of infrastructural
facilities such as electricity and telecommunication network. However, power
supply fluctuates and there is still constant failure links in networks. Since
early 2000s banks have been developing and introducing payment cards for their
customers as well as deploy ATM cards. Usage was however low due to lack of
interconnectivity i.e. switching platform to interconnect the ATM for card
holders.
1.3 AIMS AND OBJECTIVES OF THE STUDY
This
research work intends to assess the extent of electronic payment in banking
activities as well as identify the various types of electronic banking.
1. The
researcher will also evaluate the major problems associated with the
development of electronic banking system in Nigeria as well as evaluate
possible solutions to these problems.
2. The
effect of electronic banking on profitability of banks will also be assessed.
3. The
researcher will like to evaluate the impact of these e-payment systems on banking
industry
4. The
impact of electronic banking in Nigeria economy.
1.4
RESEARCH QUESTION
In
order to get information from respondents the following questions were
formulated:
1. What is the
role of e-banking on the growth of Nigerian economy?
2. What are the
various types of electronic payment and the extent of electronic payment in
banking activities?
3. To what
extent can e-banking improve or enhance banking services?
4. What are the
major problems associated with the development of electronic banking system in
Nigerian?
5. What are the
solutions to the problems associated with the development of e-banking?
6. To what
extent has e-payment affected banking activities?
7. What are the
benefits of Bank Verification Number (BVN)?
1.5
SIGNIFICANCE OF THE STUDY
Electronic
banking in our economy today is a welcome development and also its impacts in
the society are over-whelming, so this research is significant in so many ways,
it will expose the strength and weakness of electronic banking.
It
will motivate banks and other economic agents to computerize their services, knowledge
in the area of electronic banking will be advanced. Apart from contributing to
the knowledge of electronic banking, it forms a reference for future research
in this area.
1.5.
RESEARCH HYPOTHESES
H01:
There is no significant effectof e-banking on the economy of Nigeria.
H02:
There is no significant relationship between e-banking and economic development
in Nigeria
1.6 SCOPE AND LIMITATIONS OF THE STUDY
This
research is on the role of electronic banking on the growth of Nigerian Economy
using UBA saki as a case study and also it covers the various forms of payment
and electronic systems used by banks.
Limitation
of the studies include:
Financial Factor
: There is not enough money to carry out the research properly as analysed,
getting data from different source is difficult and downloading some articles
and journals is restricted because of low subscription due to financial
problem.
Time Factor: There
is limited time to carry out this research work, some area are not analysed and
some aspect are not touched due to low time or inadequate time to carry out the
research work.
1.7 ORGANIZATION OF THE STUDY
This
research work is organized into five chapters. Chapter one is concerned with
the introduction of the research study and it presents the preliminaries,
theoretical background, statement of the problem, aims and objective of the
study, significance of the study, scope of the study, organization of the
research and definition of terms.
Chapter
two focuses on the literature review, the contributions of other scholars on
the subject matter is discussed.
Chapter
three is concerned with the system analysis and design. It presents the
research methodology used in the development of the system;
Chapter
four presents the system implementation and documentation, and the data
analysis.
Chapter
five focuses on the summary, constraints of the study, conclusion and
recommendations are provided in this chapter based on the study carried out.
1.8
DEFINITION OF TERMS
Bank:
Business that keeps money for individual people or companies, exchanges
currencies, makes loans, and offers other financial services
Cashless:
Using an electronic means of exchanging money instead of dealing in cash
Cashless
Society: Society that does not use cash: A
theoretical society in which consumers purchase all goods and services by
credit card or electronic funds transfer, without the use of cash.
Electronic
Banking: The use of computers and related
networks/devices to carry out transfers of money and other banking
transactions.
Government:
A group of people who have the power to make and enforce laws for a country or
area.
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