Study Of Controlling Of Customer’s Account By The Commercial Banks
(A Case Study Of Citizens International Bank Ltd)
Commercial banks play a crucial role in controlling customers’ accounts through a variety of services and mechanisms. Customers entrust their financial assets to these institutions, allowing banks to manage and facilitate transactions, monitor account balances, and provide a range of financial products. Banks employ sophisticated technological systems to ensure the security and accuracy of account information, enabling customers to access their funds through online banking, ATMs, and other channels. Additionally, banks implement stringent authentication measures and employ encryption techniques to safeguard customer data and prevent unauthorized access. The ability of commercial banks to control customer accounts is governed by regulatory frameworks, ethical standards, and contractual agreements, emphasizing the importance of maintaining a transparent and trustworthy relationship between the bank and its customers.
The aim of this research work is to study the principles involved in controlling of customers account by the Commercial Banks operating within the country. It also high lights the different methods of operating various customers account that are being operated by the Commercial Banks.
Controlling of the operations of customers account has been regarded as the Backbone of banking activities because customers account contributes the larger part of the Bank’s profits. It has also been said many times that bank customers are always eager to find out the controlling policies that is adopted by the bank in the operation of customer’s account.
Many people have some ideologies on Bank policies but there is no written down principles that have dealt on controlling of customers account by the Commercial banks.
To accomplish the above objective, the researcher used mainly primary source of information to arrive at a conclusion.
However, secondary source of data was also used to an extent.
The secondary source of information consist mainly of review of related texts, journals and periodicals. The primary source of data collection mainly used is the interview employed to find out the performance of controlling aspect of management in Nigeria with particular reference to Citizens International Bank Ltd.
The researcher revealed that there is a great need for controlling in any organization. It was also revealed that Citizens Int’l Bank ltd. controlling mechanism is adequate in design effective in operation and consistency in application. It also highlighted some areas of constraints to the controlling aspects of Citizen’s Int’l Bank.
In order to make the work look simple, the researcher divided the work into five chapters. One to four dealt with introduction, literature review, research methodology and presentation and analysis of interview respectively.
The researcher summarized her findings and draw conclusions and made recommendation together with suggestions in chapter five.
The project was carried out by using Citizen’s International Bank Ltd. Onitsha Central branch as a case study.
TITLE PAGE
APPROVAL PAGE
DEDICATION
ACKNOWLEDGEMENT
TABLE OF CONTENT
ABSTRACT
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
1.2 STATEMENT OF PROBLEMS
1.3 OBJECTIVE OF THE STUDY
1.4 SIGNIFICANCE OF THE STUDY
1.5 SCOPE AND LIMITATION OF THE STUDY
1.6 RESEARCH QUESTION
1.7 HYPOTHESIS
1.8 DEFINITION OF TERMS
1.9 REFERENCE
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 WHAT IS A BANK
2.2 ORIGIN OF BANKING BUSINESS
2.3 ESTABLISHMENT OF CITIZENS INTERNAL BANK
2.4 THE ACTIVITIES OF CITIZENS INTERNATIONAL BANK
2.5 WHAT CONTROLLING IS ALL ABOUT
2.6 TYPES OF CONTROL
2.7 ICAEN & NOEM’S SYSTEM OF CONTROL
2.8 INTERNAL AUDIT STANDARDS FOR COMMERCIAL BANKS
2.9 OPENING OF CURRENT ACCOUNT & ISSUANCE OF A NEW CHEQUE BOOK
2.10 OPERATION & CONTROLLING OF SAVINGS ACCOUNT
2.11 OPERATION & CONTROLLING OF LOAN ACCOUNT
2.12 OPERATION AND CONTROLLING OF A FIXED DEPOSIT ACCOUNT
2.13 GENERAL METHOD OF CONTROLLING ALL THE ACCOUNT MENTIONED ABOVE
2.14 REFERENCE
CHAPTER THREE
RESEARCH DESIGN & METHODOLOGY
3.1 RESEARCH METHODOLOGY
3.2 RESEARCH DESIGN
3.3 SOURCES OF DATA
3.4 SAMPLE AND SAMPLING PROCEDURE
3.5 METHOD OF ADMINISTRATION OF RESEARCH INSTRUMENT
3.6 METHOD OF DATA ANALYSIS
REFERENCE
CHAPTER FOUR
4.1 PRESENTATION AND ANALYSIS OF DATA
4.2 TESTING OF HYPOTHESIS
CHAPTER FIVE
SUMMARY OF FINDINGS & CONCLUSION
5.1 SUMMARY OF FINDINGS
5.2 RECOMMENDATIONS
5.3 CONCLUSION
BIBLIOGRAPHY
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
“Habit” is a settled disposition or tendency to act in a certain way, especially one acquired by frequent repetition of the same act until it becomes almost or quite involuntary, a settled practice or established and regular standard of behavior.
Banking habit as used in this study, refers to the settled practice or acquired tendency of patronizing the Banks by frequently utilizing the various services offered by banks and a widespread banking awareness.
Controlling of customer’s account as known today evolved from a rather humble beginning when the goldsmith discovered that only a small proportion of the money kept with him for safe custody was infact required by the depositors at any one time.
He therefore developed a system of controlling the amount left with him and the amount led to other people. The banking system which later inherited this found out that controlling is a major aspect of the management of customer’s account.
In view of the above, the Commercial Bank’s Customers account and later seeking ways to see if the standards are being operated as prescribed is known as controlling aspects for customers account.
Indeed, commercial banks have been and are likely to remain the document financial intermediaries in Nigeria for they at present account for over 51% of the resources of the financial system tot he economy. They therefore occupy a strategic position in the economy and are more than most other units or sub-sectors able in all respects to influence the course of development.
No wander, notwithstanding the deregulation of the economy, banking is still one of the most controlled or regulated industry in Nigeria.
In the amendment to the monetary policy circular No. 21 of January, 1987, the Central Bank of Nigeria (CBN) stated that “in order to further enhance and achieve a more efficient resources allocation, the following changes were made ….. all controls on interest rates were removed in line with the emphasis on deregulation of the economy. This goes further to show the importance of commercial banks in the economic growth of the country, because inspite of the deregulation the entire economy, the banks are still constantly kept in guidelines of the Monetary Authorities.
The 1957 report of J.B. Loynes of the Bank England paved the way for the establishment of the Central bank of Nigeria.
This act was passed on 15th May, 1958 and the bank began operation on the 1st of July, 1959 with an authorized capital of N1.5million of which N1.25million was paid up.
1.2 STATEMENT OF PROBLEMS
Organizations are formed to achieve some of the organizational goals. In a private or profit making as much s possible while public enterprises are mainly created to render services tot he public. which ever role, the organization is set to achieve, it must need some resources to go about it. Those resources includes money, man, material and machine.
Usually, these resources are entrusted in the hands of some employees of the organization.
The tendency is that some of the resources are misappropriated and the policy, rules and legal requirements not complied with.
As a check on this, management may set up a controlling aspect, which will be charged with the responsibility of monitoring the activities of the employees and effecting management control.
The application or to what extent these roles are carried out by the controlling arm of management is hence the problem which this work is set to investigation. The study also centers on finding out how to improve the bank controlling policies of customer’s account as a means of increasing the chances of average Nigerians in opening an account with the commercial banks.
In summary, the problem of this research is to find out the extent to which the sample back (CIB) has installed an adequate controlling system over customer’s account as a means of guarantee customers trust and patriotism.
1.3 OBJECTIVES OF THE STUDY
This research work studies the controlling of customer’s Account by the commercial bank using Citizens International Bank as a case study. More specifically, the objective of the study are: –
To find out the roles which management can play in controlling of customer’s account.
To find out the ways that the bank operates various customer’s account..
To find out the effect of not having a good management policy for controlling customer’s account.
1.4 SIGNIFICANCE TO THE STUDY
The significance of the study is that it will highlight the importance and consequences of not having an adequate design of controlling thing principles by the commercial bank.
Some of the benefits that may accrue from this research work are as follows: –
Banks will benefit from this study through the increase in patronage of their services to their various customers.
The banks are in business to make profit and will face immediate collapse if their services are not patronized. This study, by seeking the means of increasing patronage of the various bank services through improved controlling policies therefore has a lot of significance to the banking industry.
The masses will equally benefit from this study because implementations of the findings and recommendations in this study will ultimately lead to improved standard of controlling customer’s account which will make the masses to have trust on the commercial banks.
1.5 SCOPE AND LIMITATION OF THE STUDY
This study basically covers the controlling policies of commercial banks. However, the researcher being a student combining this research with other academic work and also as a result of other constraints such as communication barrier, time factor, money and so on, the scope of this study has been limited to only CIB Ltd.
The researcher believes that the findings and recommendations made herein will be applicable to other commercial banks in Nigeria because the commercial banks of study has some features which are representative of a typical commercial bank in Nigeria.
The researcher was faced with a number of problems in the process of carrying out this research study and much obstacles had contributed to the limitations of the entire research work. Some of the constraints encountered includes:
(a). SECRECY AND RELUCTANCE OF RESPONDENTS:
The unwillingness of the Bank officials to disclose some piece of information that are vital to this study which they classified as being secret. They reminded the author of the professional and promised secrecy in their business ethics.
The researcher tried many times to ascertain various piece of information from the bank but was turned back on the condition from Onitsha central the head office for south east 2.
The researcher visited that branch and Enugu branch and this solved the problem to an extent.
(b). TIME FACTOR:
Time was one of the greatest limiting factor in carrying out this research work because the research had be to carried out concurrently with the normal lecture hours.
(c). FINANCE:
Availability of funds certainly contributed in determining the researchers area and spread of investigations, obviously, the number of visits to the bank’s branch offices. Secondly, prices of all materials needed for the work and its production had sky-rocked to almost 12 times their prices in the recent past due to inflation.
(d). LOW LITERATURE RATE:
Banking education being relatively new in Nigeria, not much work has been done directly in the area of this study. As a result, the researcher mainly relied on personal interview marathon lectures. Inspite of all these constraints, it is hoped that this research study will make meaningful contributions into the controlling policies of customers account in Nigeria.
1.6 RESEARCH QUESTIONS
1. Do the control of customers account help the customers in any way?
2. Does it have any effect on the side of the bank?
3. Do you think that the measure mapped out by the commercial banks will help in any way to control or curtail fraud and irregularities in the bank?
4. Which of the measures – like the cuterial control, operations, customers services unit etc. do you think will be best for this control.
5. What are the hindrances to the commercial banks in controlling the customer account?
1.7 HYPOTHESIS
There is one major hypothesis that forms the root of this study. The findings will lead to acceptance or rejection of these hypothesis i.e.
Null hypothesis (Ho) which will be rejected or accept the alternative hypothesis (Hi). For the purpose of this study the under listed statement of hypothesis will be tested.
(i). Null hypothesis (Ho): The control of customers account do not help the customers.
(ii). Alternative hypothesis (Hi): Control of customers account helps the customers.
B(i): Ho: The controls has an effect on the side of the bank
Hi: The controls has no effect on their side.
1.8 ASSUMPTION OF THE STUDY
In compiling the findings from this study, it is assumed that all the information supplied by the people interviewed and that the responses are true and fair representation of their opinion about the issue raised.
1.9 DEFINITION OF TERMS
1. BANK: It is an establishment which deals with money, receiving it on deposit from customers honoring customer’s drawing against such deposit on demand, collecting cheques from customers and lending or investing surplus deposits until they are requested for payment.
2. CBN: Central bank of Nigeria
3. CIB: Citizens International Bank Limited
4. ICAEW: Institute of Chartered Accountants in England and Wales.
Controlling Of Customer’s Account By The Commercial Banks:
The study of controlling customer accounts by commercial banks encompasses various aspects of how banks manage and oversee their customers’ accounts. This process is critical for the effective functioning of banking institutions, ensuring security, compliance with regulations, and customer satisfaction. Here are the key elements typically involved in the study of controlling customer accounts by commercial banks:
- Account Opening and Documentation: Banks need to establish the identity and financial history of customers when opening accounts. This involves verifying personal information, collecting necessary documentation, and complying with Know Your Customer (KYC) regulations to prevent fraud and money laundering.
- Access Control: Banks control access to customer accounts through secure authentication methods, such as passwords, PINs, biometrics, and two-factor authentication (2FA) to ensure only authorized individuals can access the accounts.
- Transaction Monitoring: Banks monitor customer account transactions for unusual or suspicious activity. Automated systems and algorithms are often used to flag potentially fraudulent transactions.
- Account Management: Customers can perform various transactions through their accounts, including deposits, withdrawals, transfers, and bill payments. Banks must ensure these transactions are processed accurately and securely.
- Overdraft Protection: Banks may offer overdraft protection services to prevent customers from overdrawing their accounts and incurring fees. This requires monitoring account balances and triggering alerts or actions when necessary.
- Account Reconciliation: Banks reconcile customer accounts regularly to ensure that the balance matches the customer’s records. Any discrepancies need to be investigated and resolved promptly.
- Regulatory Compliance: Banks must adhere to local and international regulations, such as Anti-Money Laundering (AML) and Customer Due Diligence (CDD) requirements. Compliance departments are responsible for ensuring the bank’s activities align with these regulations.
- Security Measures: Banks implement robust security measures to protect customer accounts from cyberattacks and unauthorized access. This includes firewalls, encryption, and cybersecurity protocols.
- Customer Support: Banks provide customer support services to address inquiries, resolve issues, and assist with account-related matters. This can be through online portals, mobile apps, call centers, or in-branch interactions.
- Account Statements: Customers receive periodic account statements that detail their transactions and account balances. These statements help customers monitor their finances and verify the accuracy of their accounts.
- Fraud Detection and Prevention: Banks invest in fraud detection systems and employ experts to identify and prevent fraudulent activities, such as identity theft, card fraud, and phishing attacks.
- Privacy Protection: Banks must protect the privacy of customer information, ensuring it is not shared or used for unauthorized purposes.
- Credit Control: Banks may extend credit facilities to customers, including credit cards, loans, and overdrafts. Controlling these credit facilities involves assessing creditworthiness, setting credit limits, and monitoring repayment.
- Account Closure: When customers decide to close their accounts, banks must follow established procedures, including clearing any outstanding balances, returning customer funds, and ensuring proper documentation.
- Reporting: Banks generate reports and data analytics to assess the health of customer accounts, identify trends, and make informed decisions about account management and customer services.
In conclusion, the study of controlling customer accounts by commercial banks is a multifaceted process that encompasses account setup, security, compliance, transaction management, and customer service. It is essential for maintaining trust, security, and the smooth functioning of banking operations.