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IMPACT OF PURCHASING OF BANKING SERVICES IN COMPETITIVE ENVIRONMENT

CHAPTER ONE

INTRODUCTION 

1.1 BACKGROUND TO THE STUDY 

The Nigeria economy got in power till 1986 a highly regulated economy with local, state and federal government owing a large value proportion of the national economy. However, with the introduction of Structural Adjustment Programme (SAP) in August 1986. The national economy was deregulated and most of the control were abolished while the price mechanisms system or the market force system was introduced to determine the price of goods and services. Before the introduction of the Structural Adjustment Programme (SAP), the banking industry, like other sector of the economy was owned largely and controlled by the government. 

The sector was dominated by those referred to as the Big four i.e. Union Bank, Afribank, UBA and First Bank. However with deregulation of the economy brought about the Structural Adjustment Programme (SAP), many private participants entered the industry. The competition brought by those banks offered some basic services some of the service offered by bank are receiving deposit of customers, collecting cheques of customers drawn on themselves. From this traditional function developed other services referred to as services banking. It is a related banking services and now banking activities. 

A list of services offered by banks include acceptance and safe keeping of deposits and other valuable, granting of loans and overdraft to customers, transfer of funds business services foreign exchange services, money creation, cashing credit facility, project financing service funds transfer outside and within Nigeria, letter of credit and foreign currency domiciliary account etc.  Finally, these services benefit both the provide (Bank and the receive customers) as well as the economy without them bank cannot be in business and the economy will not grow individuals and corporate activities will also be hampered. It is based on these facts that bank services become very vital even before the advent of modern banking activities.

1.2 STATEMENT OF PROBLEMS

i. To present the level of competition in the banking industry calls for strategies that will win the customer over.  ii. To understand what is purchasing what are services and how banks market their products called services. These are some of the areas this research emphasis much on. iii. Ways bank can survive and have a sustainable share of market, it must be able to properly and profitable market it products. iv. To also understand at the end of this research why banks are struggling to stay afloat in the turbulent business environment.

1.3 OBJECTIVES OF THE STUDY 

• To examine the purchasing strategies employed by bank in retaining existing customers and attracting new ones. 

• To critically examine the various financial services offered by banks to measure the effectiveness of the purchasing activities employed by the banks also the objective that are intended to be achieved.

• To inquire into the cause of negative perception on the bank by the public.

1.4 RESEARCH QUESTION 

1. Did the post reform competitive create any impact in the impact of purchasing of banking services?

2. Does purchasing have any negative effect on banking services?

3. What can the impact of purchasing of banking services contribute to the development of there industry?

1.5 STATEMENT OF HYPOTHESIS 

• Strategies purchasing activities lead to higher profit for an organisation. 

• Competition among banks lead to better quality of services. 

1.6 SIGNIFICANCE OF THE STUDY 

i. The research work is in partial fulfilment for the requirement for the award of Higher National Diploma (HND) in Purchasing. 

ii. The study will help open up the new possible avenue for further researcher, which will help to widen the knowledge of research. 

iii. The study will give the researcher as well as the public an insight on the issues, problems and prospect of Purchasing of banking in Nigeria.

1.7 SCOPE OF STUDY

As Anyanwu (200) point out, a researcher is not expected to cover a discipline in the course of his study in line with this statement, this research work would not cover every thing on this topic, but specially on the relevant aspect of the impact of purchasing of banking service and the post reform of purchasing strategies in bank services delivery in Nigeria. This study will examine the various purchasing strategies employed by some selected banks. The focus is on Nigeria banks and the study does not attempt to do comparative analysis of Nigeria banks and banks in other countries.

1.8 LIMITATION OF THE STUDY 

There is no human successful endeavour without constraints. The limitation for this study include. Financial and time constraints which restrained free movement round the study areas in order to make adequate interviews, observation and assembling of secondary data. The uncooperative attitude of some staff and customers of the selected banks by with drawing information needed. The uncooperative attitude o some staff and customers of the selected banks by with drawing information needed. If we lack the secondary data required for this work it will make the research work difficult.

1.9 DEFINITION OF TERMS 

The researcher employed simple English for easy understanding of the terms phrases few terms can still be defined. 

Purchasing Strategies: Those strategies employed by firms and organisation to attract customer to there product and services. 

Arm Chair Banking: This is a period where bankers seat and wait for customers to come and patronize them they don’t hunt for customers. 

Customer Satisfaction: This happen when the customer is pleased with the various services rendered by the bank. 

Deregulation: To allow a particular sector or allow the market forces to determine price in the market or a particular industry. 

Purchasing: This is getting the right goods and service to the right people at the right place at the right time and with the right communication and promotion. 

Bank: An institution corporate recognised by a country’s highest monetary authority government business determined by that monetary authority or government. 

Banking Business: Is a business of receiving deposit on current account, savings account or other similar account or paying or collecting cheques drawn by or paid in by customers or provision of finance. 

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