CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Congestion in banks can be viewed as a generation
problems, which is as old as banking in Nigeria itself. The Nigeria banking
section which is over 108 years old has the year tried to maintain 9 certain
degree of human and technical organization as regards bank transactions within
bank premises and across the counter. Therefore bank congestion is one problem
in the banking sector that has thrived despite new polices and ideas created by
the authorities in curbing it.
Going down memory lane, precisely in the 70’s and
80’s, the regular occurrence of long
queues was not new anymore as people were made to wait for hours before
proceeding their bank transactions.
Msungu (2007) on his book emphasizes on congestion
in banks says that considering banks at the time, a friend would quickly advise
you not to open a bank account because it is a big bother when it comes to
withdrawing your own money, it takes hours before you get it. Imagine you got
into a bank that keeps your money and you
are delayed for more than two hours before collecting a little sum of money you
have requested and of course no one gives you any explanation for undue delay
in giving you the cash badly needed. It is annoying and absurd- it is also more
annoying when “Tellers” start calling names out loudly, so that customers can
come forward to collect their money. In strict African tradition, that is not
entertained and so ways should be devised on how customers are to be called to
collect money at counters.
Also, it was normal during the manual banking system
that customers practically spent the entire day at the bank the expenses of
their other activities as individuals. This manual trend’s in banking
encouraged congestion the most. “Old generation banks’ such as Union bank
Nigeria Plc, and First Bank Nigeria were the “architects” of bank congestion
since they had a high degree of public confidence at the time. In this
situation accounts were documented in files and it was rather tedious to go
through the accounts as well as other book-keeping activities for hundreds of
people who wish to transact business that same day. The resultant effect of
these is “human congestion”, a situation whereby the bank hall is crowded and
there are too many people to be attended to at the same time.
The Nigerian clearing house activities also
compounded the problem of bank congestion. This is because credit instrument
such as cheques and bankers drafts took many days before they got cleared.
After one year of it inception, into full banking operations in July 1959, the
CBN (Central Bank of Nigeria) initiated actions in establishing a national
clearing system and thus Lagos clearing committee and a sub-committee came
together to work out details to draft the operation of a national clearing
house. Thus, the Lagos clearing house was subsequently opened in 1961 and has
quiet a number of its branches nationwide.
Furthermore, a time came when the clearing system
had to be automated so as to fall in line with international standards. In this
view the magnetic ink character recognition (MICR) cheques were introduced to
easily read cheques and were checked with the use of cheque scanners.
More
so, the problems known as bank congestion, has been in existence at a time when
“arm-chair banking” was practiced. Here, customers queued up for hours on end
before they can be attended to. This was due to the fact that there were too
many book of account to process before cash deposits and withdrawals were made.
However time count on and computerization started creeping into the banking
system 9E-banking) so in due time, the “armchair banking” was gradually
eradicated and has drastically reduced.
1.2 STATEMENT OF THE PROBLEM
Banking hall congestion is more less device that
hampers the smooth running of a job well done in a bank of financial
institutions. Bank congestion has been found to be both a human and technical
problem and has been a booster of inefficiency among banks in Nigeria.
Congestion is a menacing problem but the sad angle to this scourge is treat it
permeates other departments of banking activities thus slowing down the system.
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