OBJECTIVES OF THE STUDY
HYPOTHESIS PROBLEMS AND PROSPECTS OF CASH MANAGEMENT IN COMMERCIAL BANKS
SIGNIFICANCE OF THE STUDY
1.7 SCOPE AND
LIMITATION OF THE STUDY
DEFINITION FOR KEY TERMS
ORGANIZING/PLAN OF THE STUDY
2.1 LITERATURE REVIEW
2.2 HISTORICAL BACKGROUND OF UNION BANK OF NIG PLC
2.3 APPRAISAL OF CASH
2.4 DEFINITION OF CASH
MANAGEMENT AND MOTIVE OF HOLDING CASH
2.5 PRINCIPLE OF CASH
2.6 INSTRUMENT OF CASH
2.7 MONTERREY POLICY
2.7.1 INSTRUMENTS OF
2.7.2 FACTORS OF CASH
AND SAMPLE SIZE
3.3 METHOD OF
3.4 METHOD OF
4.1 DATA PRESENTATION AND
ANALYSIS DATA PRESENTATION
4.2. ANALYSIS OF RESULTS
4.3 DISCUSSION OF RESULT
4.4 RESULT RELATING TO
4.5 POLICY STATEMENT
concept of management was evolved as a result of existence of man. Hence, it
could be traced back to the evolution of money. In this case, the origin of
money which brings about cash management in our contemporary commercial backs
really comes as the aftermaths of the difficulties of trade by barter. Trade by
barter is a system and practice where goods are exchanged for goods and
services. Barter system has many defects and drawbacks. These include the
difficulty of double coincidence of wants, time and energy wastage, difficulty
in ascertaining the value of commodities, discouragement of large quantities
and variety of purchases, deferred payment, installment payment and borrowing
large scale production and such like.
identified the defects inevitable by barter system, people were false to
fashion out a generally acceptable means of exchange i.e. money. It worthy to
note that the paper money presently in use was originated from the receipt the
goldsmith issued to people who kept gold and other valuables with them. As
goldsmiths were taught to be honest, merchant people started keeping their gold
with them for safe custody. In retain the goldsmith gave the depositors
receipts promising to return the gold on demand. These receipt of the goldsmith
were substitutes for money, such paper was back by gold and was convertible on
demand into gold. This ultimately led to the development of bank note and
today, money has another form other than paper called coin.
money is anything that is generally acceptable as medium of exchange for making
payment, settlement of debt or other business obligations. The qualities of
money such as generally acceptability, portability, durability homogeneity,
divisibility, recognizatbility and scarcity make money and prudent management.
Paper money and coins are collectively called cash. Today, customer deposit
money with banks and banks give a promise to pay on demand the amount deposited
by the customer. The customer can withdraw all his or her money in cash for the
purpose of settling his or her debts or he or she can issued cheque by asking
the bank to transfer the stated sum form his deposit to beneficiary.
the continued patronage of a bank by a customer depends on some important
factor among which are the following:
- Availability of cash to meet the immediate and urgent needs of customers.
qualities of services rendering.
proximity of the back to the customer’s business premises.
- The approach ability and business acquisitive of its manager e.t.c.
all the reasons listed above, there is one which ranks supreme to all other
reasons and that is the ability to strike balance between the shareholder and
customer i.e. problem of profitability and liquidity are equally the utmost.
The bankers has to keep enough cash in order to meet customers demand at the
time will serve the interest of the shareholder who are expecting returns over
1.1 STATEMENT OF PROBLEM
course of the study, the research is centered on ineffective cash management in
our country’s commercial banks with particular attention to Union Bank that
which deprives our country’s banking industry of competing with banks of
developed countries of the world.
following recommendations are suitable for the solution to the problems of cash
There should be experienced and honest personnel
employed into the bank for effective and efficient management of cash.
The idle balance should be properly invested in economy income.
iii. There should also be supervisor and implementation of loans by banks so as
to ensure that the loan is well utilized for the intended purpose.
Cash inflow and outflow overtime period should be adequately prepared and
Adequate supervision to branches without notice should be undertaken to
ascertain that they operate in efficient way to improve cash management.
1.2 RESEARCH QUESTIONS
paper intends to find answer to these questions so as to achieve it objective and
for the purpose of this research work.
What are the saving services of the banks and their operation?
ii. What are the native of operation of the bank?
iii. What are
the conditions to grant loan and on what type of collateral do you grant loan?
iv. How does
cash manager meet the demand of the deposit and the shareholder?
v. What is
the policy of bank on the shortage or surplus declared by the central banks?
vi. Does your
bank has any has investment in other bank or industry?
1.3 OBJECTIVES OF THE STUDY
main objective and aim is to examine the problems and the suggested prospects
of cash management in commercial banks. It also aims the following objectives.
- To meet
- To minimize
the finds committed to cash balance.
- To proffer
strategies techniques to ensure efficient cash management as this could by the
commercial banks as modem financial organization.
determine the appropriate target cash balance.
determine how cash can be manager efficiently and effectively.
1.4 RESEARCH HYPOTHESIS PROBLEMS AND PROSPECTS OF
CASH MANAGEMENT IN COMMERCIAL BANKS
management does not have positive effect on the profitability of commercial
management has positive effect on the profitability of commercial banks.
1.5 SIGNIFICANCE OF THE STUDY
study of this research work is particularly of great importance to the bank,
government, researcher and to the public.
TO THE BANK:
study of this research work allows the bank to develop strong internal control
of cash receipts and disbursement so as to manager the inflow and outflow of
cash in order not be face liquidity crunch i.e. borrowing at disadvantage.
TO THE GOVERNMENT:
study of this work gives a means of eradication of the difficulties in the
implementation of monetary policy by the central bank also recommend a capacity
building framework for developing countries and to find loans to some
government parastatals e.g. farmers.
TO OTHER RESEARCHERS:
gives the advantage to a researcher to look at the float management 4
techniques, disbursement control and investment of idle cash, specifically
relevant data from Union Bank of Nigeria Plc
TO THE PUBLIC:
maintain adequate level of cash to meet operational and capital requirements
and to obtain the maximum yield on short term investments of pooled, idle cash
and to maintain adequate monies at hand to meet daily cash requirement of the
municipality while maximizing the amount available for investment and to obtain
maximum earning in invested finds while ensuring their safety.
1.6 SCOPE AND LIMITATION OF THE STUDY
scope of this study focuses attention on cash management in commercial banks
problems and prospects with a case study of Union Bank of Nigeria Plc.
researcher faced so many limitations while conducting the research which
includes insufficiency of data as some officials could not respond to the
questionnaire as they have to attend to their primary assignment.
of data is also part of the limitation faced in the course of this research
work as the bank officials being unable to disclose some information.
problem or limitation in the course of this research work is inadequacy of fund
because the researcher needs some amount of cash to do one or two thing (i.e.
Transportation) in the process of the researcher work. Uncooperative attitude
of respondents is another limitation the researcher faced while conducting the
1.7 DEFINITION FOR KEY TERMS
COINS: - A
coin is metal money with definite amount and weight issued and stamped by the
central authority responsible for the issuing of money in a country.
- As the name implies, it is a form of paper money which was originated from
the receipt of the goldsmith issued to people who kept gold and other valuables
BANK MONEY: -
This is the money one keeps in his or her bank account for safe keeping also
called deposit which can be given back to the owner or demand.
This is refers to as an individual, organization or club who keeps money and
other valuables with the bank for safe keeping and for future purpose.
BANK: - This
is an institution set up purposely for safe keeping of money, valuable goods
and essential documents.
CASH: - This
refers to coin and paper form of money people and organization keeps in the
bank for safe keeping.
This is an institution or a bill of exchange made upon a bank to pay a given
sum of money to a named person or bearer at a specific date.
This entails the amount of money i.e. cash every individual or organization
keeps in the bank over a period of time.
MOTIVE: - It is the desire of holding money in order to meet day to day needs
of individual or organization.
PRECAUTIONARY MOTIVE: - This is the desire for holding money in order to meet
up with unforeseen development or contingencies or unexpected expenditure.
MOTIVE: - This is a desire for holding money with the hope of using such money
kept in making quick money.
1.8 ORGANIZING/PLAN OF THE STUDY
organization or plan of the study contain what each chapter is all about.
one contain the introduction of the study, statement of problems, the research
questions, objectives of the study, research hypothesis, significance of the
study, scope and limitation of the study, definition of terms and the
organization of the study.
two contains the literature review, historical background of the case study
(Union Bank of Nigeria Plc.) corporate objectives of Union Bank of Nig, Plc,
appraisal of cash management application, control of loan and advances in Union
Bank, definition of cash management and motive of holding cash, principle of
cash management, instrument of cash management, procedure in management of
cash, monetary policy, instruments of monetary policy and readiness to hold
three reveal the research methodology, the sources of data collected sample and
sampling, the restatement of research problem, data analysis and techniques,
the design of the study and the population of the study.
four reveal the data presentation and analysis, analysis of results, discussion
or result and the result relating to the hypothesis and the policy statement.
five which is the last chapter consists of the findings, conclusion, summary,
recommendation and references.