Description
TABLE OF CONTENTS
CHAPTER ONE
1.0 INTRODUCTION
1.1 HISTORICAL BACKGROUND OF THE FIDELITY BANK
1.2 STATEMENT OF THE PROBLEM
1.3 AIM/OBJECTIVE OF THE STUDY
1.4 RESEARCH QUESTIONS
1.5 SIGNIFICANCE OF THE STUDY
1.6 SCOPE OF STUDY
1.7 LIMITATION OF THE STUDY
1.8 DEFINITION OF TERMS
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 REVIEW OF CURRENT LITERATURE
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 POPULATION OF THE STUDY
3.2 THE SAMPLE AND SAMPLING TECHNIQUES
3.3 RESEARCH METHOD/RESEARCH DESIGN
3.4 METHOD OF DATA COLLECTION
3.5 METHOD OF DATA ANALYSIS
CHAPTER FOUR
DATA PRESENTATION ANALYSIS AND INTERPRETATION
4.1 DATA PRESENTATION
4.2 DATA ANALYSIS
4.3 DISCUSSION OF FINDINGS
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
REFERENCES
CHAPTER ONE
1.0 INTRODUCTION
A bank is a _financial_institution_ that accepts _deposits_ from the public and creates _credit_ (Western Cengage, 2009). Lending activities can be performed either directly or indirectly through _capital_markets_. Due to their importance in the financial stability of a country, banks are _highly_regulated_ in most countries. Most nations have institutionalized a system known as _fractional_reserve_banking_ under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to _minimum_capital_requirements_ based on an international set of capital standards, known as the _Basel_Accords_.
Banking in its modern sense evolved in the 14th century in the prosperous cities of _Renaissance_Italy_ but in many ways was a continuation of ideas and concepts of _credit_ and _lending_ that had their roots in the _ancient_world_ (Goldthwaite, 2005). In the _history_of_banking_, a number of _banking_dynasties_ notably, the _Medicis_, the _Fuggers_, the _Welsers_, the _Berenbergs_ and the _Rothschilds_ have played a central role over many centuries. The _oldest_existing_ _retail_bank_ is _Banca_Monte_dei_Paschi_di_Siena_, while the oldest existing _merchant_bank_ is _Berenberg_Bank_.
1.1 HISTORICAL BACKGROUND OF THE FIDELITY BANK
Fidelity Bank, first known as the Bank of Fuquay, opened for business on August 10, 1909 in a one-room office in Fuquay Springs, North Carolina (now Fuquay-Varina). For the first six years a single associate, Eugene Howard, was responsible for helping the community with its banking needs. Mr. Howard knew all his customers by name and set a precedent of doing business the right way: with honesty, integrity and a passion for service. During the 1920’s, another bank in North Carolina was following a similar path as the Bank of Fuquay. Firmly rooted in the community, the Bank of Biscoe was devoted to growing small businesses and providing a stable financial presence.
The Bank of Fuquay and the Bank of Biscoe remained strong during and after the Depression. Assets grew, and each bank began to open additional branches to serve neighboring towns. By 1970, the shareholders of the two banks voted to merge the institutions and renamed the corporation Fidelity Bank. Combining the resources of the two small banks allowed for automation of services, the increase of lending ability, and expansion into new communities.
Fidelity Bank has remained strong through two World Wars, the Great Depression, the massive social changes of the twentieth century, and the local shifts from an agricultural to a technological economy. Since the beginning, the unique character of Fidelity Bank has been nurtured through conscious effort and leadership. Our foundation places a premium on trust that is based on the commitment to our customers, a century of solid banking service, and a tradition of sound financial principles. Today, Fidelity Bank serves 60 locations in 26 counties across North Carolina and Virginia and has approximately $1.9 billion in assets.
In the world of finance, a cash deposit is defined as money that is injected into a checking, money market or savings account, either via money transfer, ATM machine or through a bank teller. In simple terms, a cash deposit is money placed in a financial institution for protective custody (Goldthwaite, 2005). This money can be made available for withdrawal after the transaction is completed and is the responsibility of the bank to make the funds available to the account holder.
If a transaction is done via check, some banks may impose a minimum waiting period, but in a cash deposit, the funds are made available to the depositor almost immediately, after the transaction has been completed. Normally, financial institutions require the account holder to complete certain formalities before the transaction has been completed, like filling a deposit slip that contains information about the bank account including the account holders’ name, account number and cash amount to be deposited in the account. In banking, the verbs “deposit” and “withdrawal” mean a customer paying money into, and taking money out of, an account. From a legal and financial accounting standpoint, the noun “deposit” is used by the banking industry in financial statements to describe the liability owed by the bank to its depositor, and not the funds that the bank holds as a result of the deposit, which are shown as _assets_ of the bank.
Subject to restrictions imposed by the terms and conditions of the account, the account holder (customer) retains the right to have the deposited money repaid on demand. The terms and conditions may specify the methods by which a customer may move money into or out of the account, e.g., by _cheque_, internet banking, _EFTPOS_ or other channels. For example, a depositor depositing $100 in cash into a checking account at a bank in the United States surrenders legal title to the $100 in cash, which becomes an asset of the bank. On the bank’s books, the bank debits its cash account for the $100 in cash, and credits a “deposits” liability account for an equal amount.
1.2 STATEMENT OF THE PROBLEM
Cash-deposits and withdrawals are the main determinant of banks financial status. In a highly competitive industry like the banking sector, this issue posses some serious challenges and responsibilities to baking sector which also the fidelity bank plc Auchi is a victim. What is their recorded cash-deposit level and level of financial base? Do these records not measure up to the standard that merited them their position in the financial or banking sector? Analysis made on the cash-deposits transactions are only information services, and as such must be conditioned by the process to which they are applied unless that may only lead to false sense in the industries. It is in the light of these questions that I wish to carry out this research.
1.3 AIM/OBJECTIVE OF THE STUDY
To examine the cash-deposits pattern of fidelity bank, which forms the basis for its growth.
To determine the trend of its cash-deposits rate and use it to forecast future estimates.
To deseasonalize the data on cash-deposits.
To offer suggestions and remedies for improvement on banking.
1.4 RESEARCH QUESTIONS
How does cash deposit of banks affect the portfolio of credit by banks?
What is the impact of cash deposit on profitability of commercial banks in Nigeria?
What are the effect of cash deposit exposures on growth and profitability of banks?
1.5 SIGNIFICANCE OF THE STUDY
The significance of this great effort is to examine the rate of cash-deposits in the Fidelity Bank Plc, Auchi, it is very relevant to both management and staff of the company. It is believed that it will help management and staff to plan effectively for desirable change and improvement geared towards accessing and revealing the strength and weakness of the cash-deposits segment of fidelity Bank Plc, Auchi.
1.6 SCOPE OF STUDY
This study is limited to the cash-deposits made at fidelity bank Plc, Auchi, Branch, Auchi.
1.7 LIMITATION OF THE STUDY
The financial or banking sector has been characterized by strict and uncompromising competition and rivalry. Due to this, basic information relating to cash-deposits and withdrawal are always treated in strict confidence. This is one of the set backs or problems encountered in the course of the data collection from the sector. Management uneasy compliance to release the authentic data for the fear of other sister industries having knowledge of their financial performance and level of their been patronized by customers since they are in a competitive environment, contributed a hydra-headed limitation to this research.
1.8 DEFINITION OF TERMS
Cash deposit: Refers to the action of bank customers putting their money into their bank accounts for safe keeping and other numerous purposes.
Time Series: refers to record of the values or a collection of observations of a random process made sequentially in time. Usually at equal interval.
