EFFECTS OF COMPUTER APPLICATION ON BANK PROFITS IN NIGERIA
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EFFECTS OF COMPUTER APPLICATION ON BANK PROFITS IN NIGERIA
ABSTRACT
The study was carried out to determine the efficiency of banking processes using a computer. The focus was on the relationship between the contributions of computer applications and economic banking activities.
The scope of the investigation was not very broad, but the study was able to come up with the conclusion that the banking sector improves greatly with computers. It is very important for both ministers and researchers because it helps to determine whether the economy,
specifically the banking sector, can move forward with the help of computers; additionally, it helped to broaden the mind of the researcher on the problems that computer specialists in banks may face in the course of their banking activities.
The current textbook, computer programme, and lecture notes, as well as journals and newspapers, were used to complete the literature review.
INTRODUCTION TO CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
Inflation has been an issue in many countries around the world, particularly in emerging countries. It began in the early 1960s, resulting in the incorporation of economic policies as a measure to reduce the effect of inflation in the economy,
with the majority of these measures taken by developing countries to check the problem of inflation taking the form of the use of central bank credit control instruments. This is intended to reduce the amount of money in circulation while maintaining a low cost of living.
Nigeria, like other emerging countries, is dealing with inflation. In Nigeria, inflation has been a challenge for policymakers since the 1970s, and the rate of inflation has been increasing since then.
Various viewpoints from different economists on what inflation is are as follows:
1) The system in which too much money chases too few products.
2) There is a decrease in the purchasing power of money.
3) When there is a growth in the quantity of money in circulation.
4) Where there is an excess of salary claims relative to productivity growth.
For the sake of this study, inflation is defined as “a sustained rise in the general level of prices of most goods and services” by Ben Chukwuemeka Anibueze Banking practise volume three. That is, there is always an increase in price without any variation.
The supply of money would be impacted by an increase in wages and salaries, particularly if there is no increase in productivity, and an increase in petrol pump prices, which the federal government has undertaken, might also result in inflation.
Furthermore, government spending can either cause or raise the rate of inflation. This is because of some unavoidable government consumption spending on the economy.
The Nigerian Central Bank has attempted to regulate the economy’s liquidity position through credit guidelines, some of which are as follows:
a) Controlling the rate of growth of commercial and merchant banks’ aggregate loans and advances.
b) Assist banks in channelling credit to different sectors of the economy.
c) Regulate bank lending in order to ensure that banks exercise caution when granting loans and advances.
These principles aid in the regulation of money circulation expansion, hence controlling economic inflation.
1.2 OBJECTIVE OF THE STUDY
The central bank of Nigeria, as the apex bank, is tasked with developing and implementing monetary policy in Nigeria. The formulation of monetary policy has many objectives, which vary depending on time and place. In Nigeria, they are known as:
a) Maintaining confidence in the Nigerian currency through domestic wage and price stabilisation measures.
b) Encouragement of increased agricultural and industrial output.
c) An efficient arrangement for supplementing current government spending and providing development finance.
The central bank of Nigeria was established by an act in 1958 and given the authority to use certain monetary control instruments. Cash and liquidity ratios are regulated using these credit control instruments.
The central bank of Nigeria can also decrease liquidity by pressing government and it parastatals to remove all their deposit from merchant and commercial banks and deposit some with the central bank. This will aid in checking inflationary rate in the economy.
1.3 OBJECTIVES OF THE STUDY
The purpose of this work is to research into the obstacle of opposing effective actions performed to curb the rate of inflation in Nigeria.
To determine the efficacy of the usage of various instrument of credit control deployed by the central bank of Nigeria to check the volume of credit creation in difference sector of the economy.
To establish why inflationary rate still seems unmanageable undermining all the steps that has been taken to limit it at least to a certain level.
To identify these difficulties and give required recommendations on how to enhance employment in order to manage inflation in the country.
1.4 THE SIGNIFICANCE OF THE STUDY
This research will aid policymakers and investors. It will also serve as a guide for monetary authorities on how to control inflation in the country through the use of credit control instruments.
After identifying the problems, it will also help federal government and central bank of Nigeria in allocating resources to different sectors of the economy by checking its expenditures.
Banks would benefit from the study to solve their credit generation problem, which is a constraint to most banks’ profit-making powers.
1.6 DEFINITIONS OF TERMS
In order for one to understand this work easily, there are some terminology one needs to know. These are some examples:
1. ACCOUNTABILITY
Credit is referred to as money, which banks gives to consumers in the form of loan and overdraft
2. LOAN
This is the technique whereby a bank loans out or lends money to his customer, which will be paid back on defined time with interest.
3. EXTREME OVERDRAFT
This is a circumstance in which a consumer with a current account can withdraw more money than he has in his account.
4. INFLAMMATION
This is a condition in which the general level of prices for products and services is constantly rising.
5. MONEOLOGICAL AUTHORITY
This is the organisation in charge of controlling the supply of money. This is the fault of the Nigerian central bank (CBN) and the federal government.
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