ABSTRACT

Generally, policies and strategies of the Nigerian government towards a reformed, vibrant and competitive economy are motivated by two principal objectives: desire for economic independence and the demand for economic development. The Nigerian Banking sector is one major aspect of the economy that deals directly/indirectly with funds. However, Deposit Money Banks activities are regulated by the Central Bank of Nigeria through basic monetary policies and reforms. This study examined the effectiveness and efficiency of ' electronic fund transfer of banks in Nigeria. It seeks to identify problems inherent with electronic fund transfer as well as level of utilization of the facility by bank customers so as to serve as reference point to the Nigerian government and the relevant stakeholders charged with the responsibilities of achieving the millennium goals of the Nigerian Economic Development goal tagged "Vision 2020". Two banks were selected (First bank of Nigeria plc and Diamond bank Nigeria plc) in Abia State, Nigeria to sample data for the study. The selected banks were assumed to represent the entire Deposit Money Banks in Nigeria. Data utilized for the study were primary and secondary. Primary data made use of structured questionnaires which were distributed to 45respondents. Out of the forty five structured questionnaires distributed, three were rejected owing to inadequate data of the respondents and the remaining effectively used as sample size of the study. The probit regression model was applied in examining the effectiveness and efficiency of electronic fund transfer of banks in Nigeria for a period of 5years (2005-2007). The model revealed that contributions of electronic fund transfer on banks performance leaves much to be desired. Also, the extent of utilization of electronic fund transfer by bank customers in recent and previous times were reviewed and result proved positively related. That is, investigations show that electronic fund transfer does not contribute significantly to bank performance while it contributes positively to the socio-economic characteristics of bank customers. Following this analytical tool, this study concluded that in order to improve the economic climate for a better Nigeria, government must appreciate the must appreciate the innovation of electronic fund transfer to a very great extent. Keywords: electronic fund transfer, effectiveness and efficiency, examination, banks, Nigeria.