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APPLICATION OF COMPUTER TECHNOLOGY IN COMMERCIAL
BANKS IN NIGERIA
CHAPTER ONE
1.0 BACKGROUND OF THE STUDY
Commercial banking in Nigeria dated back to 1892, when
what emerged as the bank of British West Africa
(now bank of Nigeria)
was established. This was followed in 1917 by the Barclays bank now Union Bank
of Nigeria.
The Nigeria
banking scene was monopolized by these two banks until 1933 when the national
bank of Nigeria ltd was established. The first successful indigenous
commercials bank in the country was established, (though in October 1992, the
national deposit insurance corporation NDIC) advised the financial firm. The
bank was indebted to the NDIC for about N1bn and has a negative asset valued at
N1.8bn meaning the liabilities of the bank was more than its assets. Prompted
by the success of the NBN Ltd after it was established. Several Nigerians made
attempts to set up commercial banking institutions between 1933 and 1951. But
many failed due to mismanagement and under capitalization. This was hardly
surprising since there were no regulation of any kind to end operations of the
bank besides there was not central bank to supervise and assist in establishing
the banking system. The banking ordinance of 1952 was the first attempt to
provide a regulatory framework for the development of a sound banking industry
in Nigeria.
Commercial banks activities in the period (1959-1966) is the fact that the
central bank of Nigeria (CBN) was established at the beginning of the period
(1958)
Central bank of Nigeria main functions are:
i.
To issue
tender currency in the country
ii.
To maintain
external international value of the naira
iii. To promote monetary stability and some financial structure
Central bank of Nigeria is also charged with the
responsibility for developing the money and capital market in Nigeria. The CBN
also acts as banker and financial adviser to the federal government of Nigeria
as well as banker to other banks in the country so, one can say that the establishment
of the CBN led to a continuous strengthening of banking in Nigeria and also
within a relatively short period (1959-1966)
today, there are more than 50 commercial banks in Nigeria with balances
all over the county.
Generally, commercial banks have a great role to
play and have a major impact on the economic social and political spheres of
any national, carrying out its dual debts transactions.
The role of information technology in commercial
banks can not be over emphasized. Banking basically involves thousands of
transactions that are made daily and records may be needed for references, his
as well as cross checking and records of accounts one a transaction is made it
must be recorded in a stated form such transaction includes settlement of
cheque , the provision of regular debits
and credit exchange transactions one case see that most of the banks transaction
are computerized and processing of data and computer makes it possible for
these functions to be performed accurately and fast a s computers are machines
that by their design are able to accept s tore, process and retrieve
information the main advantage of computer in performing these functions is its
speed, accuracy and large storage capacity.
Communication is very important in banks, as the
banks have to deal with their correspondents in other financial centre, because
banks can not operate in isolation. It has to keep regular contact with its
other associates and correspondents in Nigeria. All banks receive
directives regarding their operation from the central bank communication
(information) technology available includes telex, Facsimile (Fax) electronic
mail station, satellites modems etc
1.2 STATEMENT
OF PROBLEM
Computers are increasingly becoming indispensable
nowadays many tasks of home and offices that were operating manually are being
automated at a very fast pace world-wide thus, it is becoming apparent that in
whatever discipline of study or nature of employment computer is now an important tool for efficiency improvement and
precision of job or task execution but inspite of this very few researches have
so far been conducted into areas of applications
of computer and information technology in our commercial bank.
The project intends to investigate all possible
application of computer and information technology in the commercial banking
industry in nigeria. The stud intends to address the following issues:
1.
How reliable is
the use of information technology in commercial banks?
2.
How effective
and efficient has the use of information technology improve the exact job or
task execution?
3.
What steps
should be used in order to minimize paper and storage capacities of computers?
4.
The use of
information technology is it so accurate and fast in operations?
1.3
SIGNIFICANCE OF THE STUDY
The increasing importance, which is attached to
computer and information technology in this contemporary world of business accounts
for the necessity of this study the evolution on of computers and its
increasing effects on the way we do things nowadays is important to discuss.
i.
This is for
readers and businessmen to have insight into how far and how well humanity has
gone in applying technology to our day to day living.
ii.
It is also to
advice the bank and other industries on how the nature of their operation would
look like when computerized and to get a space for other banks on the
importance of computers in their operations in today banking.
iii.
The study will
also be valuable to both individuals for a sustainable growth and development
in business and the business at large.
1.4 OBJECTIVES OF THE STUDY
The aim of this study is to appraise the utilization
of computer capability in the banking industry, through the following specific
objectives.
a)
To obtain
information on computer development and its trend in the banking industry
b)
To examine
whether there is adequate utilization or not of compute in the banks
c)
To advance
policy implications and recommendations that could enhance the prospects of
this computer usage in the banking
industry
d)
To obtain in
formation on computer development ad its trend in the banking industry.
1.5 HYPOTHESIS
The purpose of this research is to test the
hypothesis that:
Ho: The application of computer technology to
commercial banks is not an important tool for efficiency improvement and
precision of job.
H1: The application of computer technology to
commercial banks is an important tool for efficiency improvement and precision
of job.
1.6 SCOPE
OF THE STUDY
The scope of this work is limited to computer usage
in commercial banks. Since their
emergence in Nigeria
the study will be based on union bank, and it will also study the storage of information
system to be able to know information is been used step by step in a commercial
banks. The scope of this study will embrace all information technology used
in commercial banks.
1.7 LIMITATIONS
OF THE STUDY
It is important for the researcher to state things
that have put constraints in their efforts during research to obtain materials
needed for the profit.
i.
The researcher
has to take into consideration the limited time given within the which to
present the complete work.
ii.
Due to
inadequate finance, it will be difficult for researcher to personally visit all
branches of union bank.
iii.
Sourcing of
information from bank staff might not be so easy.
iv.
Inadequate
honouring of appointment by some of the people chosen for interview i.e. some
of those selected for interview do not keep to time of appointment with them.
1.8 DEFINITION
OF TERMS
Computer – A computer is a machine that follows instruction to
process data, solve a specific problem or accomplish a particular task.
Programme: The instruction that control a computer when it
performs a task is referred to as a
programme data the term data is a symbolic representation of facts about
people, objects and places etc which are raw
or undesired in their present form and need to be transformed into a
refined or desired form.
Banking:
the business of taking deposits and making loans.
Record: A set of related items or fields performing to a
particular items, unity or entity procedure: A written description of a system flow chart: A system analysis
techniques providing a graphic presentation of procedures.
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