CHAPTER ONE
INTRODUCTION
1.1 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”.
At this juncture, is good to know
what e-banking is all about.
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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