IMPACT OF BANK CHARGES ON CUSTOMER SAVING HABIT A CASE STUDY OF UNION BANK PLC
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BACKGROUND OF THE STUDY
CBN is solely responsible for regulating the operations of financial firms and actively encourages the growth of financial institutions that are either specialized or connected to development. The Securities and Exchange Commission (SEC) functions as the primary regulatory body for the financial market. Self-regulation, also known as user regulation, is practiced by the Nigerian Stock Exchange (NSE), which is an entity. The complexity of the capital chain is increased as a result of participants such as issuers, registrars, and investment dealers who participate in the money market. The Central Bank of Nigeria (CBN) and the Federal Ministry of Finance jointly administer the bureau de change and together constitute the monetary authority. Both the insurance industry and mortgage finance operations in Nigeria are regulated by their respective agencies, NAICOM for the insurance industry and FMBN for mortgage financing. Putting money aside is a kind of self-denial on the part of a consumer at the present moment; this gives rise to the accumulation of capital, which, in the long term, results in an increase in purchasing power that may be put to use in the future (Gersovitz, 1988). To put it another way, savings equal the difference between a person's current income and the amount of money spent. It was also referred to as "latent consumption," and it was considered a portion of revenue that had not been spent.
Within the framework of the structured financial system, savings are seen as a kind of financial asset that may be accumulated by both public and private enterprises. The development of financial savings necessitates the movement of money from the private and household sectors into the commercial or company sector. This, in turn, leads to an increase in investment, which in turn leads to greater income growth, employment, and the construction of capital. It would not be possible to accomplish this objective unless the rate at which Nigerians save money is increased. Because of factors such as excessive bank fees, poor capital gains, inadequate investments in productive instruments and non-productive investments, income disparity, and demonstration effects, among other factors, gold and jewelry prices, income inequality, and other factors also play a role. The level of growth of the aforementioned financial sector, in addition to the ways in which residents often save their money. One of the primary reasons for the implementation of austerity measures, which will ultimately result in a moderation of both economic expansion and economic development, is the raising of bank fees (Uremadu, 2006). Because of the intimate association that has always existed between savings and banking fees, the growth performance of many emerging nations has historically been disappointing. One such country is Nigeria, which has been blamed on insufficient savings and unwise investments. As a general rule, this anemic rate of growth has led to a precipitous drop in investment. Because of this, the already precarious state of the country's balance of payments has been further compounded by the stagnation of domestic savings rates (Chete, 1999). It is impossible to place enough emphasis on the part that savings play in the expansion of a nation's economy. In general terms, saves refer to the part of income that is set aside and is not spent on immediate needs. Instructions in the financial sector, such as deposit banks and commercial banks, mobilize savings in an economy. In order to ensure a high positive real rate, which will encourage investors to save on their disposable income, the deposit rate needs to be relatively high and the rate of inflation needs to be stabilized. According to Nnann, Odoko, and Englama (2004), the quantity of money collected by financial institutions in Nigeria is relatively low for a variety of reasons. These causes range from high bank charges to low savings rates as a result of poor habits or banking cultures. Another barrier to successfully obtaining money is presented by the perspective of banks towards individual savers. The concentration of banks and their offices in favor of metropolitan regions is skewed, which is another factor that makes it difficult to put savings to use. One of the reasons for this is that established banks tend to underestimate the austerity measures that are required to organize and engage in productive initiatives in rural regions. Because the rural economy functions at a level that is almost identical to that of the contemporary economy, it is often suggested that relatively little resources may be withdrawn from income and consumption. For this reason, it has not been established that there are significant sums of money that are not being utilized, despite the fact that there are little units per person in remote regions. There is a widespread absence of savings incentives in Nigeria, which has a negative influence on saves because of the lack of motivation. Some of these factors include poor banking practices, negative attitudes held by banks toward economies of scale, poor orientation, unemployment, instability in the political system, a tainted taxation system, and an unstable banking system. We will closely monitor the impact that bank fees have on savings.
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