THE EFFECT OF GLOBALIZATION ON BANKING OPERATION IN NIGERIA.
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THE EFFECT OF GLOBALIZATION ON BANKING OPERATION IN NIGERIA.
CHAPTER ONE: THE EFFECTS OF GLOBALISATION ON BANKING IN NIGERIA
1.0 INTRODUCTION
Until the mid-1980s, banking in Nigeria was conducted without the use of any technological instruments. Bank operations were primarily manual, with the concomitant problem of poor service delivery.
The period of new generation banks has increased rivalry in the banking business and the necessity to deliver quality services to the banking public.
This necessitated the use of some sort of automated mechanism. Kyari (2002) accepted this fact when he stated that banks began to invest in computers for basic office automation and processing, which was eventually expanded to include the provision of financial services.
With the establishment of more banks in the early 1990s, which led to the integration of banking system and ledger bank, this era also saw the massive installation of computer system and the introduction of the first set of electronic banking system devices such as automated teller machine (ATM) to the banking public.
The increased need for better services compelled banking to build speedier settlements across banks, which resulted in the funding of a Nigerian inter-settlement scheme-granting owned by banks.
In response, the central bank began to computerise its systems and processes. The adoption of the Magnetic Ink Character-Recording (MICR) cheque has reduced the number of days required to clear a cheque via the Nigerian banking system.
Although the Magnetic Ink Character Recording (MICR) was not widely adopted until the mid-1990s, most banks had implemented some type of automation or computerization in their operations.
Prior to the popularity of financial globalisation, financial liberalisation efficiency in the financial sector, many African countries engaged on financial liberalisation reforms as part of their recommendations.
Programme for Structural Adjustment:
The key message of the financial liberalisation thesis (Mekinnum 1973) is that it is a lack of competition that causes inefficiency in this sector. While interest rate liberalisation is a first step, it is recognised that this alone is unlikely to generate competition in the market due to its already oligopolistic nature.
As a result, there is not just a need to grow the number of players in this market, for which a country may be necessary to venture outside its own domestic boundaries.
To increase the number of competitors, entrance barriers must be removed so that non-financial intermediaries and foreign banks can easily enter the market.
To top a significant savings list, it is necessary not only to remove control, but also to modify regulations governing acquisition and merger activities.
This indicates that the external sector of the banking sector needs to be liberalised. Faced with the depth of financial crises that occurred in numerous countries between 1994 and 2002, a number of questions about the underlying premise of financial globalisation, particularly cross-border capital mobility, have been raised.
1.1 BACKGROUND OF THE STUDY
The purpose of this study is to assess the impact of globalisation on banking operations in Nigeria, with a focus on First Bank Nigeria Plc, Kaduna, Kakuri branch Kaduna South.
The following are the study’s particular objectives:
1. Evaluate the extent to which globalisation has altered service delivery in Nigeria’s banking sector.
2. To investigate if globalisation has had a good or negative impact on Nigerian banking operations.
3. To investigate the extent to which globalisation has altered the management of the Nigerian banking industry.
1.2 STATEMENT OF THE PROBLEM
The fundamental issue confronting the Nigerian banking system has been the provision of excellent services.
Nigerian banking clients are increasingly demanding high-quality services. Some of the issues confronting Nigerian financial operations are as follows:
I. The amount of time spent collecting cash from the bank.
II. It takes a few days for monies to be transferred from one bank branch to another.
III. It takes a long time for checks to be cleared.
IV. Value data is inefficient in the banking industry.
All of these issues must be addressed in order for banking operations to be more efficient.
1.3 OBJECTIVE OF THE STUDY
The study’s goal is to assess the impact of globalisation on our banking operations in Nigeria, with a focus on First Bank Nigeria Plc, Kaduna, Kakuri branch, Kaduna South.
1.4 THE SIGNIFICANCE OF THE STUDY
The report will be used as a resource for banking and finance students, bank practitioners, and policymakers in the banking industry.
The inefficiencies that exist in banking operations are exposed to the public and researchers in the discipline through this study. It also helps to understand how globalisation may improve service delivery to customers by incorporating current technologies into banking processes.
Through the study, one will be able to understand why First Bank Nigeria Plc outperforms other banks in Nigeria by incorporating modern technologies into its operations.
1.5 RESEARCH QUESTIONS
The study relied on primary data gathered through the distribution of questionnaires and oral interviews.
First Bank Nigeria Plc employees and customers comprise the sample population.
The statistical technique employed in the study is chi-square (X2) and t-test was used.
1.6 HYPOTHESIS STATEMENT
H0: Globalisation of banking operations has not enhanced First Bank Nigeria Plc’s service delivery.
H1: Globalisation of banking operations has improved First Bank Nigeria Plc’s service performance.
1.7 LIMITATIONS AND SCOPE OF THE STUDY
This study’s scope is that it focuses on the impact of globalisation on banking operations in Nigeria.
The study focuses on the impact of globalisation on First Bank Nigeria Plc.
The study’s weakness is that the researcher was unable to visit all of the bank’s branches in the country due to cost restrictions and time limits for the investigation.
1.8 DEFINITION OF TERM
Banking is a bank business in which the primary operations are involved with the collection of the public’s temporary, idle money for the purpose of advancing some to others for expenditure.
Bank Transfer: A payment method in which a payment is made at any branch of any bank for the account of a payee who has an account at any branch of the same or another bank.
Globalisation is the integration of commercial relations and production, the decision by economic actors all over the world to use investment capital and technology to take advantage of situations where there is competition and which can result in a greater return.
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