ABSTRACT
Appraisal
of the Economic implementation of electronic banking in Nigerian banks
(a case study of Diamond Bank) was carried out to assess the extent of
electronic payment in banking activities as well as to identify the
various types of electronic banking. A descriptive research method was
employed in carrying out the study. Questionnaire was drafted and
distributed in order to elicit response from the respondents. The
population of the study was 100 and a sample size of 80 was derived
using Taro Yamane formula. Analysis was done using tables and simple
percentage. Formulated hypothesis was also tested using X2
(Chi-square). The study revealed that electronic banking boosts the
banking activities of any nation. It was also discovered that electronic
banking offers speed up settlement of Transaction, Reduces the rate at
which customers visit Banks, move into a cashless society and reduction
of theft. Furthermore, it was discovered that electronic banking has
suffered a lot of hitches as a result of power failure and communication
link. Lack of computer backup, low public acceptance and high charges
on machines. In conclusion, the researcher therefore recommends that
uninterrupted power supply should be provided that is, standby generator
should be in place in case of power failure, provision of skilled and
computer literate in operation of the pay system. Finally government
should provide some amenities for the smooth running of e-banking and
create awareness to inform the public about the benefits derived on the
payment system
TABLE OF CONTENTS
Title page i
Certification page ii
Dedications iii
Acknowledgment iv
Abstract vi
Table of contents vii
CHAPTER ONE
INTRODUCTION 1
1.1 Background of the study 1
1.2 Statement of the problem 5
1.3 Objectives of the study 5
1.4 Research questions 7
1.5 Research hypothesis 7
1.6 Significance of the study 8
1.7 Scope of the study 9
1.8 Limitation of the study 9
1.9 Definition of terms 10
References 12
CHAPTER TWO
Review of Related Literature 13
2.1 Theoretical framework 13
2.2 Conceptual framework 16
2.3 Historical background of Diamond Bank Plc 38
References 42
CHAPTER THREE
Research Design and Methodology 43
3.1 Research design 43
3.2 Area of study 43
3.3 Sources of data 43
3.4 Populations of the study 45
3.5 Sample size determination and sampling technique 45
3.6 Instrument of data collection 48
3.7 Validity of instrument 48
3.8 Reliability of the instrument 48
3.9 Method of data analysis 49
References 50
CHAPTER FOUR
Data Presentation, Analysis and Interpretation 51
4.1 Data Presentation 51
4.9 Test of hypothesis 58
CHAPTER FIVE
Summary of Findings, Conclusion and Recommendations 68
5.1 Summary of findings 68
5.2 Conclusion 69
5.3 Recommendation 70
Bibliography 73
Appendices 75
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Before
the emergence of modern banking system, banking operation was manually
done which led to a slow down 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.
Nigeria
did not embrace electronic banking early compared to developed
countries. Nigeria adopted electronic banking system in the early 2000s. During
the introduction of electronic banking system, the use of raw cash was
said to have bred corruption through the “cash and carry syndrome”
usually linked with the swift movement of Ghana-must go” bags by some
politicians. Such bags as some analyst say, are a major source of
corrupt practices as dubious persons seek to bribe their way to avoid
been checked in some sensitive areas or places in a corrupt society.
Since
electronic banking started in all Nigeria banks, it has been a woe for
civil servants; checks show that some members of staff in establishments
such as the national boundary commission for instance, are yet to
receive their salaries for the previous months as efforts to
electrically transfer salaries into their account have failed according
to Ibrahim, Dikko. from FSDH group post (2009).
“One
bank will tell you it has transferred your salaries but the supposed
recipient bank will tell you it has not received anything leaving you
even more confused”, says John Ime. (2009). Olekah, James. (2009) while
acknowledging the initial hiccups that dogged the system, advises
stakeholders against being discouraged as such “teething problems” are
normal.
James,
Adewale. (2009) a banker reported to vanguard annual report that “we
should not destroy electronic-banking by looking at the negative
aspects; we must strive towards perfecting it”. James, Adewale. (2009)
also says that the volume of data generated by the Government ministry
Agencies is much making it a bit difficult for banks to cope, Mathew
Sunday. (2009) a worker says in his report to vanguard annual report on
banks and cards that government should have done its home work “very
well” before introducing the system, “they plugged us into a system they
were not prepared for and the result is untold hardship visited on
innocent people”.
At this juncture, it is good to know what e-banking is all about.
According
to Anyawaokoro maduka. (1999). Electronic banking is defined as the
application of computer technology to banking especially the payment
(deposit transfer) aspects of banking. He also defined electronic
banking as a system of banking with an electronic communication network
which permits on-line processing of the same day credit and debit
transfers of funds between member institutions of a clearing system.
According
to Clive Wilson. (2007) 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, Gbemi. (2007) defines electronic banking as a system in
which funds are moved between different accounts using computerized on
line/real time systems without the use of written cheques.
According
to Edit Ofure. (2008) 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.
1.2 STATEMENT OF PROBLEMS
As
earlier pointed out, 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 power failure in banks resulting to slow down in
operation.
Another
problem that emerged was that banks do not have information backup to
fall back on should there be any computer break down. In 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, couple 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’s cards. Usage was however low
due to lack of interconnectivity i.e. switching platform to
interconnect the ATM’s for card holders.
1.3 OBJECTIVES OF THE STUDY
ØThis research work intends to know the contribution of electronic banking to the development of banking system in Nigeria.
ØThe effect of electronic banking in the improvement of banking services.
ØTo
evaluate the impact of e-Payment system on banking industry and also
access the impact of electronic banking on Nigeria economy.