AN APPRAISAL OF THE ECONOMIC IMPLICATION OF ELECTRONIC BANKING IN OPERATIONS OF BANKS IN NIGERIA (A CASE STUDY OF FIRST BANK OF NIGERIA PLC)

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INTRODUCTION
1.1BACKGROUND OF THE STUDY
Prior to the banking emergence of a modern banking system in Nigeria, the payment or settlement of economic transaction was through the barter system. Goods and services purchased them were settled by the exchange of commodities as money was not in existence.
However, owing to the deficiencies inherent or associated with a barter economy, the need for a generally acceptable medium of payment arose.
Consequently, between 1850 and 1882 the introduction of British silver coins was possible through which the Nigerian economy was monetized.
Following the introduction of British coins, the Bank of British West Africa (BBWA) was established in 1892 to facilitate the distribution of these coins. This eventually ushered in a rudimentary form or commercial banking in Nigeria. In 1912 however, the West African Currency Board (WACB) was established to take over the responsibility of the (BBWA) of currency distribution in the then West African region comprising of Nigeria, Ghana, Sierre-leone and Liberia.
As economic activities began to rise and the need for financial services emerged banks began to spring-up in the country and between 1892 and 1959 a total of (39) banks were established but for the fact that this was a banking era, a good number of these banks collapsed. The colossal fall of the monetary system consequently led to the introduction of the banking ordinance or 1952, 1959 (subsequent amendment) to further boost the monetary system, the central bank of Nigeria (CBN) was established in 1959 to act as the “Apex” banking regulatory authority.
Also, the banking acts or 1969, the counterfeit currency (special provisions) decree 1974 and the bills of exchange Acts cap 35 laws of the federation of Nigeria 1990 was promulgated. All these efforts were aimed at ensuring safety, stability and restoring confidence in the monetary system.
When in 1961, the CBN established the Nigeria banks clearing house in Lagos, the use of cheques became a dominant instrument in the payment processed daily in the clearing house. An average of five million (5m) cheques were reported to be processed annually between 1961 and 1970.
According to CBN annual report, 1999, a number of procesed cheques however, increased to 11,005.2 million in 1999. This increase eventually led to an ever-mounting flood or paper that has to be shuffled from place to place before payment is fully effected. Thus, because of frequent indirect routine, it has been estimated that each cheques written is currently handled an average of 10 times and passes through 2 1/3 commercial banks before being returned to its source (journal of Banking and finance 2000). The banking industry thereby incurs record-keeping and processing costs averaging about 20 percent per cheques, a figure that does not reflect the full cost of the present system.
Eventually, this increase in the cost of cheques processing undermines the efficiency, reliability and cost effectiveness of the electronic banking system and with the geometric increase in the volume of cheques as to the likely reduction no clear indication costs of the processed cheques.

The expectation that cheque processing cost will continue to soar, roughly in proportion to cheques volume is the chief motivation spuring commercial banks and the central bank of Nigeria to institute a more economical and efficient mechanism. For as long as cheques remain the dominant mode of payments, the system is intrically too labour intensive to permit much more cost cutting through further automation (Lawrence 1996:295). As a result, the only remaining way to make a meaningful impact on cost is by switching a large part of the burden to an entirely different payments methods, one that can be designed from the groudn up to take full advantage of computage technology namely the electronic banking. (Electronic money transfer system).
Finally, according to Anyanwu (2000), electronic banking which is more commonly called the Electronic Funds Transfer System (EFTS) refers to the application of computer technology to banking especially the payments (deposit transfer) aspect of banking. The major distinct pieces of hardware comprices the Automated Teller Machine (ATM), the Point Of Sale (POS) system, and the Automated Clearing Houses (ACH). He stressed that the major merit of electronic banking lies in its ability to reduce costs given the number of cheques written in the economy each year.

TABLE OF CONTENTS
Title page ii
Certification iii
Dedication iv
Acknowledgement v
Proposalvii
Table of contentsx

Chapter one: Introduction
1.1Background of the study1
1.2Statement of the problem5
1.3Purpose/objective of the study6
1.4Research questions7
1.5Research hypothesis8
1.6Significance of the study9
1.7Scope, limitation/delimitation 10
1.8Definition of terms11
Reference13

Chapter two
Review of related literature 15
2.1Introduction15
2.2The Nigerian monetary transfer system 17
2.3Overview of the electronic 
monetary transfer system21
2.4Electronic payment instruments 24
2.4.1Automated teller machine24
2.4.2Electronic funds transfer point of sale26
2.4.3International money transfer27
2.4.4Computerized inter-bank funds transfer28
2.4.5Internet payment 28
2.5Problems associated with the development 
of electronic banking system in Nigeria.34
2.6Implications of the electronic banking system35
Reference 38

Chapter three:
 Research design and methodology40
3.1Areas of study42
3.2Sample and sampling techniques42
3.3Instruments of data collection43
3.4Methods of data presentation 43
3.5Methods of data analysis45
Reference47

Chapter four: 
Data presentation and analysis 50
4.1Data presentation 50
4.2Data analysis 63
4.3Test of hypothesis68

Chapter five
Findings, recommendation and conclusion73
5.1Summary of findings73
5.2Conclusion76
5.3Recommendation78
Bibliography80
Appendix 86

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APA

Ugwu, A. (2018). AN APPRAISAL OF THE ECONOMIC IMPLICATION OF ELECTRONIC BANKING IN OPERATIONS OF BANKS IN NIGERIA (A CASE STUDY OF FIRST BANK OF NIGERIA PLC). Afribary. Retrieved from https://afribary.com/works/an-appraisal-of-the-economic-implication-of-electronic-banking-in-operations-of-banks-in-nigeria-a-case-study-of-first-bank-of-nigeria-plc-5372

MLA 8th

Ugwu, Anderson "AN APPRAISAL OF THE ECONOMIC IMPLICATION OF ELECTRONIC BANKING IN OPERATIONS OF BANKS IN NIGERIA (A CASE STUDY OF FIRST BANK OF NIGERIA PLC)" Afribary. Afribary, 29 Jan. 2018, https://afribary.com/works/an-appraisal-of-the-economic-implication-of-electronic-banking-in-operations-of-banks-in-nigeria-a-case-study-of-first-bank-of-nigeria-plc-5372. Accessed 30 Nov. 2022.

MLA7

Ugwu, Anderson . "AN APPRAISAL OF THE ECONOMIC IMPLICATION OF ELECTRONIC BANKING IN OPERATIONS OF BANKS IN NIGERIA (A CASE STUDY OF FIRST BANK OF NIGERIA PLC)". Afribary, Afribary, 29 Jan. 2018. Web. 30 Nov. 2022. < https://afribary.com/works/an-appraisal-of-the-economic-implication-of-electronic-banking-in-operations-of-banks-in-nigeria-a-case-study-of-first-bank-of-nigeria-plc-5372 >.

Chicago

Ugwu, Anderson . "AN APPRAISAL OF THE ECONOMIC IMPLICATION OF ELECTRONIC BANKING IN OPERATIONS OF BANKS IN NIGERIA (A CASE STUDY OF FIRST BANK OF NIGERIA PLC)" Afribary (2018). Accessed November 30, 2022. https://afribary.com/works/an-appraisal-of-the-economic-implication-of-electronic-banking-in-operations-of-banks-in-nigeria-a-case-study-of-first-bank-of-nigeria-plc-5372