THE IMPACT OF CBN CASHLESS POLICY ON THE DEVELOPMENT OF THE BANKING SECTOR OF NIGERIA

THE IMPACT OF CBN CASHLESS POLICY ON THE DEVELOPMENT OF THE BANKING SECTOR OF NIGERIA

---

STATEMENT OF THE PROBLEM

As more payment systems have been introduced, pundits have been predicting the emergence of a ‘cash less society’. Today, we still pay with cash and checks, but several other payment instruments, such as credit and debit cards, are widely used. The use of paper money is more declining, but at a rather slow pace. As it were, Nigeria is a country heavily dominated by cash and there are some factors that negatively affect the choice of cash over non-cash instruments, some of these include time spent in counting and verifying cash, susceptibility to loss, time spent in the banking halls, amongst others (Nnanwobu et al, 2011). A cash-based economy is one which is characterized by the psychology to physically hold and touch cash a culture informed by ignorance, illiteracy, and lack of security consciousness and appreciation of the merit of digital payment (Ovia, 2002). Cash, as a payment system, attracts lots of negative consequences such as high cost of handling cash, risks of using cash and keeping them in houses which eventually lead to high rate robbery, financial loss in the case of fire and flooding incidents. High cash usage results in lots of money outside the formal economy, thus limiting the effectiveness of monetary policy in managing inflation and encouraging economic growth. Also high cash usage enables corruption, leakages, money laundering, counterfeiting, mis-management, mutilation and depreciation in value if not invested. Some or most of these factors are one which exists in the Nigerian economy today thus creating gap for this current study. In Nigeria today, infrastructure is a major problem that hinders the money deposit banks from attaining full potential in terms of certain policy implementations and its impact on financial transactions in the banking industry. The infrastructure in Nigeria over the years hasnt been reputable and thus has given way to ineffectiveness to the sincerity in financial transactions in the banks. The level of technology in the nation is rather poor and increasing at a slow pace and as such hasn’t given room for major development and policy implementations that may have risen. The technology available for carrying out banking transactions are not as effective as they ought to be therefore leaving people with no other choice than to keep cash in their houses in order to avoid having to spend lots of time in the banking halls due to low servers, interrupted power supply, bad internet services. Illiteracy and the low level of education of people does nothing else than leave people in the dark and therefore results into the inability of the people to understand when developments are being put into place. Many people do not see the need to keep their money in the banks or invest them due to the lack of understanding they have and also insufficient publicity and awareness measures are what have being in existence which if dealt with would at least reduce the lack of understanding of many and make them see viable reasons why they should keep their money in the banks and invest them other than keep them in their houses as a route to the safety of many lives and better growth of the economy and as such increase the standard of living. This of course, is  the motivation behind this study.   As a matter of fact, the demand for money is being taken in terms of demand deposits in banks and liquid assets outside the banks that is the average willingness of people to either hold money in cash or keep it as demand deposits in the banks effects the activities of commercial banks in controlling the amount of money in circulation, which in turn determines the hold of the CBN on the economy in terms of monetary policy implementations. The analysis of banking innovations and the response of the public towards them would help determine the hold of the Central Bank of Nigeria (CBN) on the extent to which they have been able to foster financial transactions in money deposit banks across the nation. The introduction of E-commerce has made room for various tools in transacting business, although not all of these tools have been fully utilised. The new policy adopted is such that has been made to affect the whole economy and to put in full use all of these tools which include the monetary and fiscal policies, and in turn will maximise the effort of the e-commerce innovation

 

1.3 OBJECTIVE OF THE STUDY

The broad objective of this study is to establish the relationship between CBN’s Cashless policy and the development of the financial sector and the Nigerian economy. This broad objective is broken down to the following specific objectives which are;

1. To ascertain the relationship between Cashless policy and accessibility to customers’ accounts.
2. To investigate the relationship between Cashless policy and queue-ups in banking halls.
3. Ascertain the relationship between Cashless policy and the promptness of bank-related transactions.

BUY THIS TOPIC ON WHATSAPP

Related Project Materials

THE ROLE OF COOPERATIVE IN POVERTY ALLEVIATION: A CASE STUDY OF SELECTED COOPERATIVE SOCIETIES IN KADUNA SOUTH LOCAL GOVERNMENT AREA

ABSTRACT

The only way people can maximize benefit of limited resources to their reach is by self-reliance. Therefore there is need for pe...

Read more

AN ASSESSMENT OF THE EFFECT OF ENVIRONMENTAL FACTORS ON CORPORATE PERFORMANCE

ABSTRACT

The main objective of the study is to examine how the environmental factors could affect the corporate performa...

Read more

STRUCTURAL DETAILING IN REINFORCED CONCRETE OF A THREE BEDROOM DETACH DUPLEX,

ABSTRACT

In structural detailing, the project is initiated by the structural engineer. The architectura...

Read more

PERCEPTION AND ATTITUDE OF HEALTH CARE WORKERS TOWARDS PROVIDING CONTRACEPTIVES TO UNMARRIED ADOLESCENT IN DABI BAKO HEALTH CARE CENTRE, GWAGWALADA AREA COUNCIL

Background of the Study

Adolescent pregnancy is a  worldwide public health issue; the World Health...

Read more

EFFECT OF ORGANIZATIONAL CHANGE AND DEVELOPMENT ON EMPLOYEE PERFORMANCE

Today’s business environment produces change in the workplace more suddenly and frequently than ever before. Mergers, acquisitions, new techn...

Read more

THE RATE AND CAUSES OF INFANT MORTALITY

Abstract

This study investigated the rate and causes of infant mortality. The study was carried out in Irrua Teaching Ho...

Read more

ASSESSING THE EXTENT OF UTILIZATION OF INDIGENOUS MODES OF COMMUNICATION FOR COMMUNITY DEVELOPMENT

EXCERPT FROM THE STUDY

Communication is a two way process that seeks to convey a message encoded by a Sender through a C...

Read more

THE IMPACT OF MANAGEMENT STYLE ON THE EFFICIENCY OF SELECTED GOVERNMEMT OWNED COMPANIES

ABSTRACT

The research titled “The Impact of Management Style on the Efficiency of Selected Government Owned Companies In Enugu Stat...

Read more

AN EVALUATION ON STUDENTS PERCEPTION AND ACADEMIC ACHIEVEMENT IN CHEMISTRY (A CASE STUDY OF SOME SELECTED SECONDARY SCHOOL IN DAWAKIN TOFA LOCAL GOVERNMENT AREA OF KANO STATE)

BACKGROUND OF THE STUDY

Chemistry as a science subject plays a vital role in transforming the environme...

Read more

THE IMPACT OF PROMOTION ON CONSUMER PATRONAGE OF PHARMACEUTICAL COMPANIES (A CASE STUDY OF GABBEY PHARMACY LIMITED ENUGU).

ABSTRACT

This research project is aimed at determining the impact of promotional strategies of pharmaceutical firms on c...

Read more