ABSTRACT
This research work was designed to investigate the assertion that e-banking is a giant facilitator of business transactions.
Electronic Banking System is a process of using modern technologies such as the computers and its peripherals to carry out banking operations. This system of banking cannot be overemphasized in the sense that there are more aspects of business transaction which this system can provide solution for, because it is a dynamic system.
Actually, in this research work, questionnaire were administered to respondents from various Banks and analysis was carried out on the response from the respondents, these analysis were subsequently evaluated and came out with a conclusion which further strengthened the claim that e-banking system is truly a giant facilitator to business transaction.
Based on this, a recommendation was made that every bank should be encouraged to embrace Electronic System of Banking.
CHAPTER ONE
1.1 INTRODUCTION
In our contemporary time, Banks exist in different forms and hence it becomes difficult to attribute a single and unique definition for the term “Banking”, but we shall consider the definition of banking from different perspectives.
A bank can simply be defined as a place where money and valuable possessions can be kept for safety. Also a bank is an institution for receiving and lending out of money. These are dictionary definitions of what a bank is.
Some eminent scholars also defined a bank in different forms: Dr. Hart (1931) in his law of banking for example defined a bank as any person or company carrying on the business of receiving monies and collecting drafts for customers, subject to the obligation of honouring cheques drawn upon them from time to time by the customers to the extent of the amount available in their account. (Okoh, Unugbro 2003)
From the legal point of view, a bank can be defined based on the findings of several decided cases. This is hinged upon what might be happening at that point in time. For instance the highest court of the land, the Supreme Court of Nigeria in F.M.B.N Vs NDIC (1999), pronounced that the word “bank” in its ordinary grammatical meaning means an organization or place that provides financial services.
Statutorily, a bank or banker is defined as any company who transact the business of banking which include banking services, such as acceptance of deposits from the general public, making payments to depositors on demand to the extent of the money available in their accounts, granting loans and advances to credit worthy customers, involvement in clearing of cheques and keeping of current accounts amongst others in their books where credits and debits are recorded.
Buttressing this point further, the banks and other financial institutions decree (No 25 1991) (BOFID) provides for the establishment and licensing of banks and conditions for the revocation of such licenses.
Provisions are made for minimum paid-up share capital, minimum capital ratio; minimum holding of cash reserves, specified liquid assets, special deposits and stabilization securities; maintenance of reserve fund; restriction on payment of divided; restrictions on certain banking activities, maintenance of proper books of account; publication of annual accounts; and proper auditing of bank accounts, among others.
Based on these numerous activities that go on in the banks, which are somehow difficult to carry out manually, there arises the need for electronic banking system which will help to facilitate these operations which forms the pivot of this project work.
We can now define “Electronic Banking” as the method of using the computer system to automate operations that are carried out in the banks, such as the opening of accounts, receiving of deposits from customers, withdrawals by customers, updates of account et cetera.
Prio to the advent of e-banking, banking operations have been manually carried out. We have a scenario where customers go to the bank and stay on a queue, waiting for the cashier to manually carry out debit and credit on each customer’s account before attending to the next one on the queue; also reports were manually printed and submitted to the head office from a branch office. These procedures became tedious and time consuming. Customers spend all day in the bank, and to the bank workers they could spend more than necessary hours in the bank, trying to balance and reconcile accounts using the old manual methods. These problems motivated fast-thinking individuals who then initiated the automated system of banking (i.e. e-banking) in order to facilitate all the processes involved in the banking system. The introduction of adding machines, magnetic ink character recognizer, ATM, electronic purse and wallets, etc now came on board to boost up the activities in the bank.
1.2 OBJECTIVES OF THE STUDY
Electronic banking which in short form is usually referred to as “E-banking” has been in existence over three decades in developed countries, such as the United Kingdom. “The Automated Teller Machine” (ATM) was first introduced in the United kingdom in 1967: (Hanson 1979). This system of banking was introduced in Nigeria by the societe Generale Bank in November, 1990. The bank introduced “The Automated Teller Machine” (ATM) to its Board Street and Apapa branch where their trade name was “cash point 24”.
Consequently, the First Bank Plc came on stream, a year after, with their own ATM in December, 1991. Thus, the First Bank Plc’s ATM was located in various branches of the bank with “First Cash” as their own trade name.
The main aim of this study is to show how this new system of banking in Nigeria can facilitate the operations that are performed in the bank within the shortest possible time or period. Some of the components of e-banking such “ATM” help to decongest the pressure at the counters in their respective banking halls since “ATM” performs all the withdrawal functions. Computerization of the Nigerian banking system is a kind of electronic banking which involves an electronic form of money transmission.
As earlier stated, in electronic banking, services such as transferring of money and every other transaction are performed in a moment.
In most Nigerian Banks, electronic banking products are limited to the automated teller machine, electronic fund transfer, the Magnetic Ink Character Recognition (MICR) and the electronic smart cards.
1.3 SCOPE OF STUDY
This research work is designed to cover to an extent the importance of electronic banking, component machines that are functional in a computerized bank, and facts finding about people’s opinion in adopting e-banking in Nigerian banking system. Moreover, we shall consider the benefits and demerits of e-banking.
- JUSTIFICATION
This also refers to the significance of the research work; which means long term objectives that the researcher uses to contribute to the stock of knowledge when the research work is completed.
Based on the above definition of justification, this research work is actually aimed at getting the best possible in this computer age by using all the necessary technologies to achieve good and quick system of banking in our society. These technologies entail the use of computer system and its peripherals in the bank to carry out processes. This will helps to overcome the stress of manual procedures which have been in practice.
1.5 RELEVANCE OF THE STUDY
The relevance of the research work cannot be over emphasized more especially at this period when the banking system is becoming more congested with volumes of work and teeming population which patronize the bank.
Moreover, the competition in the banking industries calls for the need of an e-banking system, as customers would prefer banks where their request can be met in no time rather than staying in a place where procedures are carried out manually.
1.6 LIMITATIONS
Due to the complexity of e-banking system coupled with the various sophisticated technologies that accompany it as well as the time constraint, this research work will cover only the necessary and essential issues of electronic banking such as machines that involved e-banking, why e-banking in Nigeria? Opinions of people about e-banking system, advantages and disadvantages of electronic banking system, as earlier stated in the scope of study.
