CHAPTER ONE
1.0 INTRODUCTION
According to the business dictionary, a
bank is an establishment authorized by a government to accept deposits, pay
interest, clear checks, make loans, act as an intermediary in financial
transactions, and provide other financial services to its customers. Banking is
defined as the business of providing financial services to firms and business,
receiving deposit on current account, saving account, paying or collecting
cheques drawn by customers and other similar payment. The business dictionary
defines banking as a system that involves a structural network of institutions
that offers financial services within a country. It also stated that the
banking system typically performs several functions which describe them as
follows:
v
Commercial banks – they take deposits and make
loans.
v
Investment banks – they specializes in capital
market issues and trading.
v
National central banks – they issue currency and
set monetary policy.
In
other words it can be said to be a person or company carrying on the business
of receiving money and collection of drafts for customers. Current account is
the account operated mostly by businessman, the self-employed and also the
civil servants. The major characteristic of this account is that the money paid
in can be withdrawn without notice unlike in fixed account. Current account is
the only bank account involving the of cheque book by the customer. It is the
type of account associated with the commercial bank as stated earlier on. A
teller is to lodge in money, which is credited to the customer’s account and
the deposited money can only be withdrawn with cheque or ATM card (automated teller
machine card). The statements of account are prepared periodically to keep the
customers abreast of their account position. Commissions are charged for
services rendered to customers. An excess of debits over credits are usually
written in red to signal danger and is called overdraft. This attracts interest
for the days outstanding at an agreed interest rate. Current account attracts
other charges such as commission on turnover (COT) based on total money
withdrawn at the end of a given period usually a month. The introduction of
computer for data processing brought big relief and breakthrough to users of
the old system of data processing the manual method. This project aid Nigerians
to obtain efficiency in their current account transactions and smooth current
account running operations like prompt generation of report , easy payment,
account update, immediate view of the customer’s financial states etc. This work is divided into six major chapters
in order to bring down the ideas of using top down mechanisms of utilizing the
system files. However, the chapters are interrelated.
1.1 STATEMENT OF THE PROBLEMS
Current account is an account for serious
minded people. The Bank workers are serious in the manipulation of figures,
charging interest, bank charges on loan and overdraft are drawn with precision.
However, human brain cannot be relied on completely. At times they make
mistakes in the manipulation of figures or even charge wrong customer. This is
attributed to man’s inability to work efficiently and effectively for a long
time with his brain. Some people however think that acquisition of riches or
wealth is the only purpose for human existence because of this attitude to
life, they develop an insolent tendency to exploit all revenue or hole that with
cause fraud in their work place or where they bank. This causes problem for
banks.
This work is designed to replace the
existing manual current accounting system for the United Bank of Africa plc, No
14 Niger bridge head Ogboefele market, Onitsha. In order to alleviate the
problems besetting the manually operated current accounting systems. United
Bank of Africa plc is a firm charged with the responsibility of receiving cash,
cheques and other instrument for collection and subsequent credit or debit to
the customer’s account. To reduce inherent problems of the current account
system to the barest minimum, take good record of customers, their account and
other vital information, the need to design a computerized system cannot be
over-emphasized.
1.2 AIMS
AND OBJECTIVES OF THE STUDY
The major aims and objectives of this
project is to eliminate the anomalies and influences in account computation and
increase the speed of operation, secondly, to reduce the number of mistakes and
fraud encountered with the use of manual operations. Hence this project is
geared towards the ratification of the banking system here in Nigeria and to:
i. Restores the customer’s confidence on the banks by
giving them the required services.
ii. To eliminates the bottlenecks that increase the
time wasting in banks.
iii. Provide well organized database for management
information system and other decisions.
iv. Obtain a result that is more accurate reliable.
v. Produce a system that fast and cheaper in terms of
cost.
vi. Make for easy of reference.
1.3 SIGNIFICANCE
OF THE STUDY
Therefore, this
study will lessen the burden in processing of the account, in the sense that it
will expose the fast rate at which computer works, it will allow the worker to
keep accurate record of an individual. Also, this study will introduce
mediation between the account holder and worker whereby the account record will
always be accurate and should always be paid in time.
1.4 SCOPE OF THE STUDY
This research concentrates on the automation of current
account transactions and the operations concerned in the opening current
account, closing the account and depositing into account and withdrawals from
the account.
1.5 LIMITATIONS OF THE STUDY
The package was aimed at covering all the operations
concerning the current account. But due to the security consciousness of the
bank, detailed information was not made available to me. Other factors that
limited the study were time and lack of other necessary materials.
1.6 DEFINITION OF TERMS
COMMISSION ON TURNOVERS (C.O.T)
Every current account has
commission on turnover (C.O.T) attached to it. Commission on turnover is the
amount the bank charges its customers based on the amount the customer wants to
withdraw. The charge is applicable only to current account users. For example,
if a customer who is operating on current account or who is a current account
holder wants to make a withdrawal of N500,
000, an interest of 5% will be charged for the withdrawal.
The calculation is thus:
(5/1000) * Principal
amount of withdrawal
(5/1000) * 500000 = 2500
It means that if a
customer withdraws N500, 000 the
customer will be charged N2500 for the withdrawal. Except if the customer is a
substantial customer a substantial customer is a customer that makes a lot of
turnovers, the bank will then reduce the (C.O.T) to 3% instead of 5%. Every
customer that operates on current account, c.o.t will be charged at any point
of withdrawals.