ABSTRACT
The research was based on the topic “mobilizing Domestics savings for economic growth and development in the banking industry. (A case study of Union Bank of Nig PLC 1999 ” 2000. In carrying out this research, I examined thoroughly. The various factors, which militates severely against the effective and efficient mobilization of domestic savings these factors were identified to range from the level of income earned of the saver. The interest rate that the bank pays on depots of customers, to the effect of bank distress syndrome in the banking industry. Efforts were geared towards recommending various measures the bank can use to improve greater mobilization of domestic resources in our bank. The various ways through which an increase in domestic savings mobilization can also effect on increase in economic growth and development were also identified. These include granting of loans and overdraft of to deficit customer, assisting in the provision of amenities to the host community generating employment and affirming of scholarship and promotional programmes. The research was accomplished through the use of questionnaires and secondary data. The testing and analysis of relevant data obtained were done through the use of chi ” square statistical test techniques.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
It is universally acknowledged that the banking including play a catalytic role in t he process of economic growth and development. This acknowledgement is reinforced by contemporary conceptualism to the effect that banks are a veritable vehicle for mobilizing resources from surplus units and tempting same to deficit unit. Banks constitute perhaps the most important segment of the financial market through mobilizing savings, but also allocating them for investment purposes.
In Nigeria, domestic savings rate is relatively low compared to most other developing countries with the same for capital income level. In the past, investment rates were high and hence there was no problem for raising funds.
Under the present economic dispensation, the companions or the drive for savings deposit has been stepped up by banks and non- bank financial institutions. It is However not sufficient because the range and type of financial assets available are equally important. There is a wide range of saving instruments offered by banks and non – bank financial institutions in Nigeria today.
However, most of the voluntary and non – contractual financial savings consist of savings and time deposit. Although other types of deposit such as savings certificate and premium savings bonds play important roles in banks and non – banking institutions. Banking institutions are today competing strongly with additional frame benefits which almost all banks are now offering. This contractual forms of savings is aimed at persuading depositors to invest in long term deposits.
Another area some banks are foreseeing to mobilize funds today is the mortgage saving: because large number of Nigerians need accommodation of their own but funding it is difficult with their meager income. Interest payment on deposits accounts also have some positive impact on the propensity to save. Bank have also been allowed by the government to open domiciliary account for Nigerian exporters in which proceed of exports can be paid or saved until when they are needed. Transaction costs related to operating a new accounts and making deposits and withdrawals are now becoming relatively easier particularly for small savers. There is also the pension scheme which seeks to induce depositors to invest small sums of money over a specified period of time in the hope of receiving a stream of benefits upon reaching the age of retirement.
Conversely the crisis of confidence in our banks is a great setback for the banking system. In the past the majority of those who patronized the banks did so in order to find safer place for their money. And for many years banks in the country were the character of currency store house. But because of the lack of confidence in banks today, a sizeable amount of Nigerians keep their currency or cash at home and this makes most of cash unpaired by the banks. Most of our industries depend on commercial bank assistance in form of overdraft, short term and long loans for effective operation.