CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
Before the
emergence of modern banking system, banking operation was manually done which
lead 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 do 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 seeks 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 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, D. (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, I. (2009). Olekah, J. (2009) while acknowledging the initial hiccups that
dogged the system, advises stakeholders against being discouraged as such
“teething problems” are normal.
James, A. (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, A. (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 S. (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”.
According to
Anyawaokoro, M. (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, W. (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,
G. (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, O. (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.
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