THE ROLE OF CASH MANAGEMENT IN THE OPERATION OF NIGERIA COMMERCIAL BANKS (A CASE STUDY OF UBA PLC ILORIN BRANCHES)

TABLE OF CONTENTS

Title page

Certification

Dedication

Acknowledgement

Table of contents

Chapter one

Introduction

Statement of problem

Objective of the research

Research methodology

Significance of the study

Definition of uncommon terms

Organization plan/chapterization

Chapter two

Conceptual review

Empirical review

Chapter three: Research methodology

Restatement of the research question

Research design and data collecting instrument

Characteristics of the study population and sampling

Administration of the data collecting instrument

Procedure for processing collected data

Limitation of methodology

Chapter four: data analysis and presentation

Introduction

Presentation of data

Test of hypothesis

Analysis of data base on research question

Analysis of report

Generation

Chapter five

Findings

Summary

Conclusion

Recommendation

CHAPTER ONE

1.0       INTRODUCTION

The major aim of business organization whether commercial or industrial is to make profit, an enough profit to remain in the business. Thus, it is necessary for an organization to identify the area(s) to be exploited towards the achievement of its goals and its substance in the business.

To the commercial banks, the most sensitive area that could mark its our right demise it, cash management that is why it is said in banking industry that the importance of cash management is equal to the existence of the industry itself.

Cash management through very important to every organization is more pronounced in the commercial banks because it is the basis of their transactions. Availability of cash to the customers encounter constant in availability of cash. Thus could lead to panic withdrawal, movement of accounts and reduction in cash lodgments.

Before now only commercial bank attached most importance to the area of cash management but since the mass distress of commercial banks and finance houses which could be attributed to its cash management is now being religiously pursued in commercial banks as tool for survival.

It is therefore, necessary in the cause of this research to let the customers know that there is more to cash and its management than what they see in their day to day transaction in the commercial banks.

The business should be able to match its cash outflows with cash inflows, even when it is growing the pace of growth of the business should not outstrip the ability of the business to finance the additional as sets that it need to support the growth.

There ought to be efficient management control over stocks, debtors and creditors. A distinction should be made between essential capital expenditure and postponable fixed asset replacements so that decisions can be made when necessary about shelving certain capital expenditure project.

Using United bank for Africa Plc one of the most viable bank in this country will no doubt intimate the customers with cash management procedures in the banks as well as equipping them with the need for some measures or action to be taken at time in relation to cash in the commercial banks.

The project dwell extensively on the area of cash transactions, control and management in UBA Plc as obtained in most of the commercial banks.

1.1       STATEMENT OF PROBLEM

The study is to have in depth knowledge of cash management in commercial banks.

The selection of UBA Plc is as a result of its viability and the location of some of its branches in the commercial nerve center of Ilorin. The problems encountered in the course of the project were that of getting relevant data and time. Data are not readily available and where they are available they are not accessible because in most cases, they sought to get clarification from their Head office before making the available. The reason given is that some of these relevant data can not just be disclosed without the consent of the appropriate authority because of their competitor.

The short period couple with chaotic transportation problem in Ilorin was a big constraint to the demand of the research work.

1.2       OBJECTIVE OF THE RESEARCH

This research work is embarked upon to achieve the following objective:

i.          To determine the importance of cash to the commercial banks.

ii.         To determine various sources of cash to the commercial banks and suggest way of managing them.

iii.        To identify and analyze various internal control measures in cash lodgment and disbursement.

iv.        To revive cash management procedure within and outside the branch and recommend ways of improving them

v.         To focus the votes of cash management in the distress commercial banks.

vi.        Outline and analyze various that could prevent commercial banks from accepting cash and honouring customers demand for cash

vii.       Review various control bank guidelines that affect the cash management in commercial banks

1.3       RESEARCH METHODOLOGY

The research will be carried out in five branches of United Banks of Africa plc based in Ilorin, the research method is an empirical one which involves the collection of data through personal interview and administrating of research questionnaires to the branch managers, accountant cash officer and officers.

Some managers, accountant cash officers and officers in these time selected branches for the research will be made to seek their opinion on the level of cash management and the participation of staff as well as the effects on improper cash management on commercial banks. The process is hopes to least for five working days.

The questionnaire is divided into four sections. Section one entails the personal data, section two and three are concerned with the educational background and working experience respectively.

While section one, two and three are designed for the purpose of determining the biographic characteristics of the respondent section four is to know the essence of cash management and this is adhered to in the commercial bank.

1.4       SIGNIFICANCE OF THE STUDY

The roles which improper cash management has played in the distress of various commercial banks and even finance house has prompted me to make use of one of the most variable banks in Nigerian, UBA Plc, as a case study for others to know the cash management procedure that is obtained there and identify their areas of mistakes.

The research work will also broaden the knowledge of the customers in the area of cash transactions and the reasons behind some cash control.

1.5       DEFINITION OF UNCOMMON TERMS

Cash management is the process of utilizing the available cash in an organization to the maximum advantage of the business and the customers.

Cash management in commercial banks unlike other organization do not deal with how cash are received and spent rather, it is the acceptance and safe keeping of deposits and ability of making some available to the customers when demand and at the same time being able to make maximum utilization of it within the interval.

Cash management in commercial bank entails that.

i.          The sources and duration of every deposit should be identified and recognized

ii.         Fraud that could arise as a result of improper handling of cash are prevented with proper internal control measures.

iii.        Adequate insurance in undertaken to identify the customers from losses that could arise through banks breaking, fire and other disasters.

iv.        Adequate dual control measures are adhered to in every face of cash transactions.

v.         The cash officers should know their average daily cash utilization as well as being able to make reasonable cash projection.

vi.        Necessary cash balancing procedure is utilized to the fullest.

vii.       The cash officer know that branch limit and request for evacuation while still covering this excess with insurance overnight.

viii.      The branch religiously pursues the central bank guideline on cash on cash lodgment and withdrawals.

ix.        Customer are advised on security and adequate securities are provided for the cash within the branchy as well as the ones moved from branch to branch and branch to head office.

The essence of the cash management itself which is fact is the reason for the above measures in for the customers to collect their deposition on demand without any sweat of excuse

1.6       ORGANIZATION PLAN/CHAPTERIZATION

This study has satisfied certain objectives which it sets to achieve one of such is that this study has determined that commercial banks employ cash management total and control in their operations.

There was also a conclusion that improper cash management could lead to a collapse of a commercial bank. While majority of the respondent welcome central bank of Nigeria’s intervention, those who are against based their argument on undue interference and commercial banks not given former hand to operate.