ELECTRONIC BANKING AND THE IMPLICATION ON THE ECONOMIC OF NIGERIAN BANKS

CHAPTER ONE

1.1  BACKGROUND TO STUDY

Britannia Concise Encyclopedia (1995) defined Bank as a financial institution authorized to provide variety of financial services, including customer and business loans (generally short term), checking service, credit cards and saving accounts. A bank is a financial institution authorized by its charter to perform certain functions (Osuala 2001).  The bank is a financial institution set-up purposely for safekeeping of money, valuable goods and documents like wills and gold.  It collects surplus funds from the general public, safeguards them and makes them available to the true owner when required and loans out fund (at interest) to those who need them (Obi 2002).  In a nutshell, a bank is an institution engaged in safekeeping of monies, issuing drafts, and giving loans on interest to those who are in need of such.

 The statutory functions of bank become more complex because of the complex nature of business activities and the increase in demand and number of customers, as well as the competitive nature of banking industry. (Irechukwu 2000).  This made the bank to look inward to customer oriented services which will enhance efficient and effective customer services, Again, the business of banking is no longer perceived as merely the generation of deposit, liabilities and creation of liquid assets, but rather the generation, storage, manipulation, communication and application of financial information.  Traditional banking is characterized by physical decentralization with branches scattered around populated areas to give customers easy geographical access.  The physical banks also serve to assure customers that their bank has substantial resources and can guarantee the security of their saving- (Loekeft and Rifter (1997).   Information technology has however, also penetrated the banking sector.

 Information technology, according to