CUSTOMER ORIENTATION IN BANKING INDUSTRY
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CUSTOMER ORIENTATION IN BANKING INDUSTRY
Chapter one
INTRODUCTION
A community bank is a type of bank in Nigeria that discounts cheques at a negotiated rate, makes acquisitions or sales of securities, collects cheques, and distributes dividends. It pays recurring and other payments on behalf of its consumers.
The reception of deposits from customers, who include individuals, businesses, banks, and sometimes governments, on current accounts, savings accounts, and deposit accounts is a fundamental component of the banking industry. Based on the resources obtained, it either lends and advances to other customers or invests in security placement at commercial banks.
Community banks act as agents for other banks, accept payments from customers, and issue drafts, circular notes, and letters of credit. It also accepts bills for customers, serves as a trustee, and manages securities and other assets for customers. They also provide business consulting services to customers.
As a result, community banks not only function as fund mobilizers but also aid in the distribution of cash to diverse economic sectors. A community bank is legally required to return its customers’ balances,
either on demand or when the sum credited to them becomes due. Only by honouring these duties to consumers will the community banking system’s credibility be maintained.
In general, community banks cover their expenditures and earn profits by borrowing at one interest rate and lending at a higher one. Commissions are also charged for certain financial services provided to customers.
1.1 Background of the Study
General Ibrahim Badamasi Babangida, Nigeria’s Head of State and Commander in Chief of the Armed Forces, replicated the concept of a community bank in his 1990 budget speech.
Since then, institutionalising the system has come a long way. One of the most important aspects of the process is the lack of an operational manual suitable for the activities of community banks.
Unlike a traditional commercial bank, a community bank serves both as a provider of financial services and as an active participant in its town’s economic development. This dual purpose places significant responsibility on the administration of a community bank.
These obligations necessitate that management be especially sensitive to the credit demands of the numerous small and medium-sized producers, as well as the responsibility of mobilising the community’s savings to meet this credit demand.
A community bank begins as a tiny bank with an unlimited capacity for expansion. It is critical that it be cost-conscious and conservative in its expenditure and operational methods,
as well as inventive and proactive in terms of mobilising funds to develop a high-profitable asset portfolio. (National Board for Community Banks (NBCB) operations manual, December 1991, page 1).
Ohha Community Bank Ltd, like other community banks, is located at No. 1 Ogui Road in Enugu. Ohha Community Bank Ltd was established in 1997 under the company and alied matter degree 1990, primarily to act as a community bank that is accountable for the financial needs of its catchment region.
Ohha Community Bank Ltd began operations with a paid-up capital of less than $3 million to serve the community’s interests. This bank is authorised by the Department of Bank Order Financial Institutions and the National Board for Community Banks.
The bank’s authorised capital of N5 million was fully paid up. Individuals and organisations serve as shareholders. The bank’s equivalent banks are Standard Trust Bank Plc (STB), Union Bank of Africa (UBA), and Hallmark Bank plc.
1.2 Statement of the Problem
Banking within the service industry. The quality of services provided by our banks has been criticised by people from all walks of life. Government officials, businessmen, the media, and the general public are all extremely critical of banking services.
Complaints range from inefficiency, favouritism, excessive delays in cashing checks or making withdrawals, fatigue in giving loans or credits, and a hostile attitude of bank employees.
Even the government, which holds a sizable part of most banks’ shares, has repeatedly accused banks of failing to identify with the nation’s goals.
The Chief of General Staff had reason to appeal to bankers to abandon armchair banking and embrace the marketing approach in conducting research banking activities.
As a result, most banks fail to prioritise their customers as they should. There is currently fierce competition, and to compete requires to employ the marketing approach.
Are these criticisms justified, or are they simply a negative portrayal of the banking business because it is profitable during an economic downturn?
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