COMPUTERIZATION
IN COMMERCIAL BANK
(A
case study of access bank plc. maraba
nasarawa state)
ABSTRACT
The study focuses on Computerization in Commercial
Bank, due to the increased population of customers trooping to bank premiers
and criminal attacking people withdrawing money and coming from the bank. This
system would be a web based system that would help to reduce the number of persons
going to the bank, it would allow customer to open account, check balance and
make fund transfer online using an internet enable device. This system is
developed with Micro Media Dreamweaver 8.0 as the programming tool and My Sql
as the Database (back end).
CHAPTER ONE
1.0
INTRODUCTION
A web based system help an organization to reduce
physical contact with their clients, customers, buyers etc., it help the
organization to pass circulars, collect personal and vital information from
registration process, organization can collect detail documentation of
biographical data of her employees and
clients within a short period of time.
This is a Project work undertaken in context of computerization
in commercial bank as simple as possible using Structured & Modular
technique & Menu oriented interface. I have tried to design the software in
such a way that user may not have any difficulty in using this package &
further expansion is possible without much effort. Even though I cannot claim that
this work to be entirely exhaustive, the main purpose of my exercise is perform
each Employee’s activity in computerized way rather than manually which is time
consuming.
1.1 BACKGROUND
OF THE STUDY
The
study focuses on Computerization in commercial Bank, the introduction of
computer to Banking operation has transform the banking system and has make
banking easy and flexible.
In
spite of the several measure adopted by the banks in other to carry out their
day to day transaction due to the increase of customer coming to bank to
carryout transaction day to day. It is yet to meet its objective of
effectiveness. This study was born out of the need to profound a lasting
solution to the banking transaction as it has to do with Access Bank plc.
1.2 STATEMENT OF THE PROBLEM
Computerization
in commercial Bank has some problem that must also be considered when
evaluating our prospect for achieving economic growth and stability in the Access
bank Plc. The research is to identify those areas where the concept of a
website may be effectively utilized and establish the solution to online banking
problems of Access bank Plc. in Maraba,
Nasarawa state. Some of the problems are as follow:
1.
Over loading of the bank
2.
Over stress on the staff.
3.
Unsatisfied Customer.
1.2
OBJECTIVE
OF THE STUDY
The objective of this research
includes the following:
i.
To determine various step involved in
customer management.
ii.
To evaluate the extent to which the
Access bank plc adhere to the cash management principles.
iii.
To seek the causes of the present state
of the state of business transaction in the Bank
iv.
To present suggestion that could help in
greater improvement.
v.
To Design a website that will help to
carryout bank transaction
1.3
SIGNIFICANCE
OF THE STUDY
Many
businesses have been stunted by lack of liquid fund prompt payment by customers.
These are therefore many options left for Eco Bank. Some of the option is:
1.
Improve customer transaction and gain
constant level of business transaction.
2.
Relax credit policy and gain a subsequent
increase in the collection of dues in
the bank.
3.
Tighter customer registration and
control policy thus giving
4.
rise to a sharp decrease in the availability of fund to run the bank.
1.4 THE
RELEVANCE OF THE STUDY
The
relevance of the study is therefore to:
I.
Make the payment of dues easier and
convenient to both the customer
and staff of the bank.
II.
Justify the importance of good cash
management in the bank
1.5 SCOPE OF STUDY
The
topic “computerization in Commercial Bank” is one that needs comparative analysis
of two or more department within the Bank to reveal the relationship and
variance among them. But due to financial and other constraint, the research work
only covers the Access Bank plc
1.6 LIMITATION
OF THE STUDY
The
following were the hindrance encountered during the research work.
1.
Reluctance of personnel in the
department to give information regarded
as classified and confidential.
2.
Financial and time constraint.
1.7 RESEARCH
QUESTION/ HYPOTHESIS
This
topic Computerization in commercial Bank, is designed with the following study taking into cognizant.
1.
Interview on the site observation and focus.
2.
Fact finding and recording from the school, management.
3.
Detail study of the current system leading to the specification of a new
system.
4.
Research from the library and internet.
RESARCH QUESTION
I.
Are the cash supposed to be collected
being collected?
II.
What are the factors which constitute
bank operation
III.
Are internal control system instituted
to control the collection and spending of the cash being strictly follow by the
bank
1.8
DEFINITION
OF TERMS
CASH: Cash
is any medium of exchange that bank will accept as face value e.g bank draft
currency, cheque money orders and bank deposit.
CASH MANAGEMENT:
This the management of the monies of a flow in order to attain maximum cash availability
and maximum interest income on any surplus cash or idle fund it is the control
over responsibility for the acquisition and investment of funds.
CASH BUDGET: This
is an estimate of cash receipt and disbursement for a future period cash
requirement cash resource of various point within the period and cash at hand
at the end of the previous.
BUDGETARY
CONTROL: These systems which use
budget have a means of planning and control all aspects at producing or selling
commodities or services. Although financial oriented it require full
recognition to be given to the fact that participation of director and manager
is essential.
CASH
FLOW: This a tracing in successive
steps and item of aggregate of income or expenditure from their recognition in
the account to their final disposition or less identity.
FLOAT: Is
the deposit that has been credited
conditionally by a bank to its customer
account cheque may not draw against such deposit cleared three days or less are
normally required for domestic paper
where the bank experience with a customers or with certain type of
paper has been satisfactory
LIQUIDTY:
This refers to a firm or corporation cash position with its ability to meet
maturing obligation.
CHAPTER TWO
LITERATURE REVIEW
2.0 GENERAL OVERVIEW
Cash
is the important current asset for the operation of the business. Cash is the
basic input needed to keep the business running on a continuous basis. It is
also the ultimate output expected to be realized by selling product or services
manufactured by the firm. The firm should keep sufficient cash neither more or
less. Cash shortage will disrupt the firms operation while excessive cash will
remain idle without contributing anything towards the firm’s profitability.
2.1
LITERATURE
REVIEW
According
to Accounting dictionary by Eric and Kohler (2009): define cash as “money
negotiable money order and cheque and balances on deposit with banks after
deducting outstanding cheque ” cash having such limited use bearing a
descriptive title is given a separate balance sheet position .
The
dictionary of Economics and Commerce by J.L Hanson define cash as “strictly
money in the form of bank note and coins” Banks regard cash as its balance at
bank since withdrawal on the cash can be made from it any time. In the same respect, business firm regard it’s
balance at bank as cash.
The
control of investment in current assest begins with cash management. Cash
consists of the corporation holding of currency and demand deposit being by far
the more important for the corporation holding of currency and demand deposit
being by far the more important for corporation and most organisations.
Another
aspect of online cash receipt is that it is concern with the management of:
1.
Cash flow into and out of the corporation
2.
Cash flow within the corporation and
3.
Cash balance held by the corporation at
that time.
Computerization
in commercial banking which facilitate cash management assumes more importance
than other current asset because cash is the most significant and least
productive asset that the corporation holds it’s important because it is use to
defray the corporation obligation, although unproductive like fixed assets. It
does not produce goods or services for sale, the aim of cash management
therefore should be to maintain adequate cash position to keep the corporation
sufficiency liquid. Computerization in commercial banking is also important
because it is difficult to predict cash flow accurately and that there is no
perfect coincidence between the inflows or at times cash inflows will be more
than cash payments, because there may be large cash sales and debt may be realized in large sum promptly.
In
order to resolve the uncertainty about cash flow prediction and look of
synchronization between cash receipt and payment, the department should develop
some strategies for cash management: cash planning, managing cash flow, optimum
cash level and investing idle cash.
Cash planning:
cash planning is a technique to plan for and control the use of cash; it is
concern with cash inflow and outflow which should be planned to protect surplus
or deficit for each period of the planning period.
1.
Cash planning protect the financial
condition of the corporation by developing a protected cash flow statement from
a forecast of expected cash inflows and outflow for a given period.
Cash
planning is very crucial in developing the overall operating plans of the
corporation and may be done daily, weekly, monthly, quarterly, or yearly basis.
Normally the period of frequently of cash planning depend upon the size of the
corporation.
A
centralized cash management would normally expect influence from the center
while in a decentralized responsibilities for planning and controlling implying
that branches or division has control over their debtor and creditors.
2.
Managing the cash flow: Cash must be
seen as both a major product of and on essential input to the corporation so
that there is need for cash flow to be examined in deficit.
The
cycle of cash flow must be manage if the firm’s financial health is to be
maintained and the money market offer unique services to assist manager in the
task.
Once
cash budget has to be prepared and appropriate net cash flow established the
financial manager ensure that their does not exist a significant deviation
between projected cash flow and actual cash flow and in order to achieve this,
cash management efficiency will have to be improved through a proper control of
cash collection and disbursement.
The
main objective of managing cash flow is to coordinate the movement of cash and
this coordination needs analysis and planning required achieving effective
control of the corporation cash flow.
2.2
METHOD
OF EASING CASH SHORTAGE
The
method of easing cash shortage is to accelerate cash collection and to
decelerate or delay cash disbursement.
i.
Accelerating
cash collection: The Corporation can conserve cash and
reduce its requirement for each balance if it can speed up the cash
collections. The corporation can accelerate its cash collection by making use
of the technique known as decentralization collection. It is a system of
operating through a number of collection center instead of a single collection,
the corporation will have a large number of bank account operated in the areas
where the corporation has its branches the collection entirely will transfer
fund above some predetermined minimum to a central bank account generally at
the corporation head office.
ii.
Controlling Disbursement: Effective
control of disbursement can also help the corporation in controlling cash and reducing
the financial requirements while the objective of the corporation in collecting
cash is to speed up collection as much as possible, the objective of
disbursement by delaying payments the corporation can make use of the trade
credit given to them as a source of finance which is interest free and this
results in maximum availability of funds.
Although
developing disbursement may danger its credit standing as this can put the
corporation in difficulties in obtaining enough finance.
2.3
MOTIVES
FOR HOLDING CASH
1.
Transaction
Motive: This is money held by people to take care of day to
day expenses or expenditure e.g money for transportation etc. transaction etc. transaction motive is influence by level
of income, current price level, length of time between pay days, spending habit
etc. the higher the income the more money
is held for transanctions.
2.
Precautionary
Motive: This motive for holding cash help for unforeseen/
emergencies such as ill health accident e.t.c. It is money kept for the rainy
days. It is influenced by one’s level of income, health condition environment
e.t.c
3.
Speculative
Motive: This is money held for investment purpose as in
purchases of bonds, securities good at period of low price for resale’s at
period of high price e.g when bond price are very high and investor speculate a
price fall in price. Also if the future of an investment is bright, people will
invest now with liquidity preference falling. Speculative is influence by
prevailing investment condition, interest rate, inflation e.t.c.
4.
Optimum
Cash Level: Determining the amount of cash the
corporation needs at a point in time is a difficult task. The amount of cash
required by corporation both in hand and at bank to a large extent depends on
the volume of the business and to the industry.
Cash balances are required to
overcome unusual and unexpected rush for cash if the corporation has little
cash, it can be in liquidity difficulties to earn profit. Maintaining a sound liquidity
position of the corporation so that due may be settled in time is one of the
primary responsibilities of the financial managers.
As cash constitutes a proportion of current
asset the ratio of the cash balance to their level of current asset is a
measure, which will assist in the management of cash.
The cash rate is given below
Current
asset
|
= 50%
|
100,000.00 1
11111
00
|
2.4
MEASUREMENT
OF CASHFLOW
They are two approaches to the measurement or
movement in cash flow that is two alternative framework which can be used as a
basis for reporting, monitoring or
forecasting cash movement they are
regarded to as the “cash book and the “cash tank” approaches.
The
cashbook approach is so called because it is simply as summary of what a
recorded typical corporation cash book is, it therefore reveal that source of
cash receipt and the distribution of cash payment.
The
cash tank approaches on the other hand concentrate on those management
decisions which cause the cash to flow other than on the book keeping
consequences of such decision. The final cash position must be the same
irrespective of the approach of measurement used, but it is believed that the
financial stability of the corporation believed that the financial stability of
the corporation is much more hopeful as
a forecasting framework and also as a much a predictor of impending financial
difficulties.
2.5
CASH
CYCLE
Cash
does not just flow on its own accord, it flow as direct consequences of
management action or inaction in operating the cash tank.
This
cycle of cash flow must be managed well if the corporation financial health is
to be maintained and the money market officers unique services to assist
manager in his task. There are often ten categories of management decision
which cause cash to flow. These are summarized below.
They
have not been in detail as this study implicitly focused on Computerization in commercial Banking and not
the working of management decision.
1.
Operating decision
This culminate
in potential cash flow from operation before tax
2.
Capital Expenditure decision
a)
Acquisition (purchase)
b)
Disposal (sale)
3.
Inventory decision
a)
Increase in inventory
b)
Decrease in inventory
4.
Customer credit decision
a)
Increase or extension of credit
b)
Reduction of credit
5.
Supplier credit policies
a)
Increase or extension of credit
b)
Reduction of credit
6.
Other acceptable credit terms
7.
Taxes on profit
8.
Financial obligation.
a)
Interest payment
b)
Dividend payment
c)
Repayment of borrowed capital
9.
Investing decision
These include the
utilization of temporary surplus funds.
a)
Purchase
b)
Financial decision
10.
Financial
decision
a)
Shareholders
b)
By
borrowing :These also includes the raising of long term loans by means of
debenture issued/ debenture loan stock.
For
the purpose of this study; it is believe that any useful analysis of cash flow
will highlight the impact of these two decision areas of management to use such
analysis to guide the corporation along a path of solvency.
2.6
CASH
BUDGETING AND FORCASTING
Cash
budget is the significant device to plan for and control cash receipt and
payment. A cash budget is a summary statement of corporation expected cash
inflow and outflow over a projected time period. It gives information and
magnitude of expected cash inflow and cash balance over the projected period.
This information help the financial manager to determine the future cash need
of the corporation, plan for the financing of the needs and exercise control
over the cash and liquidity of the corporation.
The
time horizon of a cash budget differ from corporation to corporation, monthly
cash budgets may be prepared by the corporation whose business is affected by
seasonal variation.
Daily
or weekly cash budget should be prepared to determining cash requirements. If
cash flow show extreme fluctuation’s budgets for a long interval may be
prepared if cash flow are relatively stable.
In
preparing a cash budget, the financial manager has to forecast cash receipt and
payments.
2.7 HISTORICAL
BACKGROUND AND THE ORGANIZATION
Access
Bank Plc. was established over the past 26 years, Access Bank Plc. has
transformed from an obscure Nigerian Bank into a world class African financial
institution. Today, Access Bank is one of the five largest banks in Nigeria in
terms of assets, loans, deposits and branch network a feat which has been
achieved through strong long-term approach to client solutions – providing
committed and innovative advice.
Access
Bank has built its strength and success in corporate banking and is now taking
that expertise and applying it to the personal and business banking platform it
acquired from Nigeria’s International Commercial bank in 2012. The last two
years have been spent integrating the business, investing in the infrastructure
and strengthening the product offer.
As
part of its continued growth strategy, Access Bank is focused on mainstreaming
sustainable business practices into its operations. The Bank strives to deliver
sustainable economic growth that is profitable, environmentally responsible and
socially relevant.
The
Beginning (1988 – 2001)
- December 19, 1988: Access Bank was issued a banking license
- February 8, 1989: Access Bank was incorporated as a privately owned commercial bank
- May 11, 1989: Access Bank commenced operations at its Burma Road, Apapa Head Office
- March 24, 1998: Access Bank became a Public Limited Liability Company
- November 18, 1998: Access Bank listed on the Nigeria Stock Exchange
- February 5, 2001: Access Bank obtained a Universal Banking License from the Central Bank of Nigeria
The
Change
In
March 2002 the Board of Directors appointed Aigboje Aig-Imoukhuede as Managing
Director/Chief Executive Officer and Herbert Wigwe as Deputy Managing Director.
The mandate was clear: “Reposition the bank as one of Nigeria’s leading
financial institutions within a five year period (March 2002 – March 2007).”
This task was perceived by many as impossible given the realities of the Bank
at the time. Simultaneously, Mr. Gbenga Oyebode, who brought commendable and
useful board experience gathered from some of Nigeria’s leading companies,
including MTN Nigeria, Okomu Oil Palm Plc, was also appointed to the Board. The
new management team subsequently created a transformational agenda for Access
Bank which represented a departure from all that characterized the Bank in the
past and became the road map for the conversion of the bank into a world class financial
institution.
The
focus was to:
- Assemble a credible and high caliber management team
- Introduce a culture of excellence founded on professionalism and integrity
- Ensure Human Capital Development
- Enlarge the shareholder base
- Introduce strong procedures and processes to drive day-to-day Bank activities
- Instill a passion for customer service in all members of staff
- Establish a low cost liability generation strategy
- Expand branch network to cover all clearing zones within Nigeria
- Create a world-class brand
The
impact of the transformation agenda was reflected in the first year. The bank
grew its balance sheet by 100% and posted an impressive N1 billion profit
before tax. The profit before tax figure was more than the cumulative profit
made by the bank in the previous 12 years. This also marked the beginning of
what would be a six year record triple-digit growth trend. Similarly, earnings
per share had rebounded to 21 kobo from a negative 2 kobo position, leading to
a declaration of a 5 kobo dividend to shareholders for the first time in three
years.
In
recognition of the role of an enhanced capital structure, the Bank embarked on
a capital raising exercise in July 2007. The exercise was an astounding success
recording an over subscription of over 300%. The public offer comprised of an
Over-The-Counter GDR placement of US$250 million which was similarly
oversubscribed by 700%. The Bank’s shareholders’ fund today stands at over N240
billion with an expanded shareholder base of over 1,000,000 domestic and foreign
investors.
Access
Bank is consistently seeking for ways to expand its service platform across the
African continent. The bank currently operates through a network of over
403branches across major cities and commercial centers in Nigeria, Gambia,
Sierra Leone, Zambia, Rwanda and Democratic Republic of Congo.
Key
Moments in Access Bank’s History
Year
2002
- Appointment of Aigboje AigImoukhuede, Managing Director/Chief Executive Officer and Herbert Wigwe, Deputy Managing Director, with a mandate to move the bank from 65th position to top 10 by 2007
Year
2003
- Determined the most actively traded stock on Nigeria Stock Exchange Market
- Recorded N1 billion PBT (exceeds cumulative profit for the last 12 years)
Year
2004
- Successful public offer raised over N14.5 billion, recording 133% over subscription
- Received the Hewlett Packard Award for the best implementation of a core banking application (Flexcube 6.2) in West Africa
- Selected as one of the seven banks to disburse the European Investment Bank's N50 million SME facility
Year
2005
- Acquired Capital Bank and Marina bank via merger by absorption and completed integration within 60 days
- Netherlands Finance Company (FMO) US$15million Investment in Access Bank listed on the NSE
Year
2006
- Access Bank launches suite of wealth management products for high-net-worth customers
- Access Bank launches MPower Biz Account, designed to empower SME business owners, the Bank's flagship retail product
- Launched first Nigerian online car leasing service ’Auto online’
- First Nigerian Bank to partner the International Finance Corporation(IFC), an arm of the World Bank, forthe introduction of the IFC’s Gender Empower Programme
- Appointed Primary Dealer/Market Maker for government bonds by the Debt Management Office (DMO)
- The first Bank in Nigeria to receive US$15 million convertible investment from the IFC
- Appointed as a Settlement Bank by the Central Bank of Nigeria
Year:
2007
- First Nigerian Bank to introduce and commence the use of Visa Credit Cards in Nigeria
- First Nigerian Bank to obtain EMV certification for multicard ATM service platform
- 1st Nigerian Bank to receive funding from the Belgian Investment Company Fund for developing countries
- Access Bank implements the Bond Index Tracker
Year:
2008
- Successfully concluded 3rd public offer raising over US$1billion (3.5 times oversubscribed).
Year:
2009
- Access Bank launches its ‘Going Green’ campaign in Lagos
- Access Bank launches its ‘Going Green’ campaign in Abuja
- Access Bank signed the Convention on Business Integrity Treaty
- The Access Bank UK Limited wins Adams Smith Award for Best Practice and Innovation
- Access Bank adopts Equator principle for CSR
- Adoption of International Financial Reporting Standard
- Frist Nigerian Bank to voluntarily establish an Ombudsman Office
- 3rd Bank in Nigerian banking industry to adopt IRS Account reporting style in addition to GAAP
Year:
2010
- Access Bank is awarded the ‘Most Socially Responsible Bank in Africa’ award from the African Banker Magazine
- The IFC Global Trade Finance Program determines Access Bank is the ‘Most Active GTFP Issuing Bank in Africa’
- Access Bank launches its E-Learning Portal
- Access Bank is declared the ‘Best Clearing Bank in Oshogbo Clearing zone 2009’ (Oshogbo Branch) at the Maiden edition of Oshogbo CBN award night
- Final of Mirror the Master Art Competition held in Lagos
- Access Bank held the third SME Work Place Policy Programme in Minna
- Access Bank held the second SME Work Place Policy Programme in Enugu
- Access Bank held the first SME Work Place Policy Programme in Lagos
Year:
2011
- Access Bank judged the ‘Sustainable Bank of the Year for Africa and Middle East’ by Financial Times and IFC
- Access Bank receives the business in the community ‘Big Tick Award’
Year:
2012
- Access Bank and Intercontinental Commercial Bank(ICB) merger judged Africa`s top M&A deal of the year
- Access Bank Plc, judged ‘Best Bank in West Africa’ by the African Banker
- Completed recapitalization of ICB
- Revised corporate philosophy; new aim to become ‘Africa’s most respected Bank’
- Partnered with Friends Africa to implement SME Workplace Policy in Sub-Saharan Africa
- Ranked fourth largest bank as a result of the ICB acquisition
- Listed on London Stock Exchange (LSE)
- Successfully raised US$350million Eurobond
Year:
2013
- Articulated the next 5 year rolling plan with a clear objective of becoming the ‘World’s Most Respected African Bank by 2017’
- Achieved AA- credit rating from S&P (one of the best among tier 1 banks in Nigeria)
- Resolved post-merger integration issues
- Divested from non-banking subsidiaries’
Year:
2014
- Won risk management award by Conrad Clark Nigeria in collaboration with Business Day and the UK Institute of Risk Management
- Designated ‘A Significant Important Financial Institution’ by the Nigerian Central Bank
- Major IT improvement program roll-out: migration from Flexcube to Oracle 11g Database Technology
- Emerged as the overall winner in the ‘Credit Card Product of the Year’ category at the annual Card and e-Payment Africa Awards ceremony
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