BANKER - CUSTOMER RELATIONSHIP IN NIGERIA BANKING INDUSTRY (A CASE STUDY OF UNION BANK PLC)
TABLE OF CONTENT
Title page i
Title page v
1.1 Background of the study
1.2 Purpose of the study
1.4 Scope of study
1.5 Methodology and source of data
1.6 Organization of the study
Organization of plan
2.0 Literature review
3.0 Research methodology
3.1 Development of banking industry
3.2 Structure of Nigerian banking industry
3.3 Practice in the bank
3.4 Regulations guiding the practice in the banking
3.5 The nature of the banker and customer relation
3.6 Terminations of banker and customer relationship
3.7 Reason for relationship
4.0 Presentation and analysis of data
4.1 Data presentation
4.2 Analysis of data
5.0 Summary conclusion and recommendations
1.1 INTRODUCTION OF THE STUDY
The role of banking industry in the development any country cannot be over emphasized. Their roles will even be more glaring in case they have enough customers; since it is the deposit of these customers they use to carry out their various roles.
Moreover, banking profession is one of the noble and most respectable in all over the world. The profession is fast gaining its respectability and dignity in Nigeria; this is because many Nigerians prefer to keep their money and other valuables in the bank
Rather than keeping it under their pillows beds and in private safe of individual Nigerian as it was observed in April 1984 during the currency exchange exercise where more shocking discovers were made when it was revealed that there was a tremendous increase in the volume of currency outside the banking system. Without any doubt there must be reason that should be responsible for the above mentioned statements and the reason were not farfetched from the fast that any customer lost faith in the manner in which the banking services are rendered. Many Nigerians were unhappy over the solid way Nigerians, banking commercial bank treat their customers.
Despite the fact that there has been a considerable expansion in the number of bank, as well as their network in Nigeria. This should at least he expanded to promote healthy competition to the advantage of the customers of banking services both in term of quantity and quality public of large had complained about one thing or other against their banks.
It will not be out of point to say that new and unsure expecting worse dilemma may surface should these problem are not face squarely in order to restore users confidence in financial institutions
This project therefore is an attempt to combine the difference easily identifiable, criticism of banking services. An attempt will equally be made to recommend solutions.
1.2 PURPOSE OF THE STUDY
Regarding the above the main purpose of this study will be to find out what complaints the customers have against their bank. The awareness of such complains and the possible solution to it.
In doing this the development structure practice and regulations of banking system will be reviewed so as to determine the exempt to which they affect bank/ customers relationship in Nigeria.
the relationship between bank and customer was so loose in days past when the banking service was announced but for the purpose of this study this hypothesis have formulated for testing throughout the research project – modernization and complex nature of banking services had made the relationship to be more tired than it could be assured
1.4 SCOPE AND LIMITATION OF THE STUDY
due to the fact that there are many banks, in the country and they are very complex in nature, the collection of data and information will be limited to union bank of Nigeria limited and the tide of financial constrains that is more pronounces every where it is practically a bone creaking issue for researchers to research and time as well contributed to it
1.5 METHODOLOGY AND SOURCE OF DATA
Source of data will be that of secondary, only by use of text books, journals, news paper, national dailies and other sources of information.
1.6 ORGANIZATION AND PLAN OF THE STUDY
The essay is broken down into five chapters. Chapter one dealt with the introduction of the study purpose of the study hypothesis scope and limitation of the study methodology and source of data and organization and plan of the study.
Chapter two is the literatures review in which series of definition of bank or banker, bank customer duties of the banker and other than chapter three will base on the research methodology of banker and customer relationship development of banking industry in Nigeria structure of Nigeria banking service practice in the bank.
The nature of the banker and customer relationship, termination of banker and customer relationship and reason for the relationship. Thereafter, chapter four which will deal with data collection method procedure for data analysis, limitation to the methodology conclusion and problem encountering by banker and customer in the their relationship.
While chapter five concludes the project that is the summary, conclusion and recommendation and conclusively references.
2.0 LITERATURE REVIEW
Candidly the aim of this project will not be achieved without making references to the views of various eminent and prominent writers, authors, experts and personates who have made reasonable contribution to the above subject matters.
In this chapter however reviews on the definitions of bank and customer. The rights and duties arising from bankers and customer relationship and the rules governing such relationship will be carefully looked into and discussed but before then, it is of utmost paramount to briefly sort out the origin of banking service e in Nigeria. really, prior to British banking, it is unknown whether Nigeria had a private banking system asking to those of the gold smith or money changers. What we have was the traditional thrift system as ‘OSUS” IN SEDO “ESUSU” YORUBA, ADASHE” IN HAUSA AND OTUTU” IN IGBO.
The traditional thrifts system is a sort of saving association whereby member contributes a definite some periodically to a common find. The total sun in each period is given to member in turn. This system is still in practice today although to a lesser extending among government workers and market women.
The first bank established in country (Nigeria) was essentially and British bank, this was the Africa bank co-operation by the west Africa shipping conglomerate Messer elder dumpster and company purview of the shipping company and took the name British bank west Africa (BBWA) with 10,00 capital in 1894, this bank later become first banking of Nigeria plc
In 1917, Barclay’s bank came into Nigeria market, which is presently known as union bank plc. Also the national bank of Nigeria came into existence in 1933 as the first indigenous bank. Other banks that were established before that time failed as a result in adequate capital fraudulent practices and bad management.
After the second world war, numerous bank grew up in the Nigeria economy, between 1945-1947 four other indigenenous bank (ALB, Agbomagbe Nigeria penny and Nigeria farmers and commercial bank) were established but only two were able to survive viz the African continental bank and the Agbomagbe bank (now wema bank plc) in fact the period 1945-1952 was a period of free for all n\banking in the period 1950-1951 alone , about 18 banks were established but by 1954 most of them had either gone in liquidation close down by the police or never started business as all.
A lot of factors candidly led to the failure of these banks most had insufficient capital some extended their officers to rapidly and there were no banking regulation to specify the code of conduct.
Whilst the expatriate bank had access to oversee liquidity trained personnel and management expertise e.tc the indigenous bank originated from state support, suffered from political interference, lacked adequate expertise, poor finding and lack of confidence. Nigerian law no longer allows the establishment of foreign bank with a majority foreign interest. The chaotic and intolerable situation led the government to appoint to Mr. G. path in 1948 to inquire general into the business of banking in Nigeria and make recommendation to the government on the forms and extend of government control which should be introduced.
The Paton commission recommended government control through legislation and the restrict in the use of the “word bank” in the interest of the general public and those that engaged in the business of banking. Following this recommendation of banking was passed which was late repealed by the (amendment) act 1988
Meanwhile, it was been a difficult and controversial task to an acceptable definition of a bank in view of its diverse activities. However several attempts have been by its activities rather than by status.
One may however consider the definition of banker under three heading some statutory definitions. The view expresses by the counts several attempts by some text books. Writers have been made to offer a wide and an acceptable definition.
Dr Herbert hurt in his law of baking described a banker or bank as “a person carrying on the business of receiving money and collecting drafts for customer subject to the obligation of honoring cheques drawn upon them from time to time by the customer to the extend of the amount available on their current account”
section two (2) of the bill of exchange act of 1882 stated that a banker include” a body of person whether in – corporate or one who carry on the business of banking” also, the bankers book evidence act 1879 stipulated that “the expression banker mean any person’s partnership or company carrying on the business of banking and having daily made a return to the commission or of inland revenue and also any sewing bank certified under the act relating to saving bank in Nigeria.
However, the business of banking was treated like any other business and there was no practical definition of bank until 1952 when the paton commissioner set up in enactment of the first ordinance.
The commission defined banking business of receiving from the public on current accounts, money which is to be retable on demand by cheque and for marking advance to customers. This includes “a commercial banks, acceptance house discount house and financial institutions. (Adekanye 1986) currently section 51 st the banks and other financial decree 1991 as well banking business as the business of receiving deposit on current accounts saving account or drawn by or paid in by customers portion of finance or such other business as governor may by order published in the gazette designate as banking service.
In the case of Stafford vs Henry (1850) it was recognize that to be accepted as a banker, it is important to prove that
a. cheques for customers were collected.
b. Cheques drawn customers were collected
c. The business of banking must be the principal acerbity undertaken
d. Current account were opened and operated
However, in the case of united dominions trust ltd vs UDT ltd, the four requirements were not satisfied, and on that basis could not be considered as a banker.
Meanwhile it was held by a majority of the court of appeal that by regulation at least UDT was a banker and therefore not an unlicensed money lender. it is now a fair their a member of facilities are expected of an institution by customers and regulatory authorities before it is considered to be a bank. And they are the following:-
i. The lending of money at a profit
ii. maintenance of current account
iii. A debtor or creditor relationship
iv. The hosting of cheque and the mandate
v. The issuing of cheques forms and the collection of cheque
vi. The moral acceptance of any person as a customers
vii. The relationship of confidence and secrecy
viii. And the reputation as a bank in general.