Effect Of Bank Charges On Customer Saving Culture: A Case Study Of Union Bank Plc

Project and Seminar Topics with material for Banking and Finance

Effect Of Bank Charges On Customer Saving Culture: A Case Study Of Union Bank Plc


This research work assess the effect of bank charges on saving culture a case study of union bank Enugu. On this research work we determine the relationships between banks and their clients suggest that there are many factors that are at play in determining the relationship between banks and their clients. Thus the following objectives were formulated to ascertain those factors that affect bank savings in Nigeria, to identify the various irregular bank charges made by commercial banks in Nigeria and to determine the effect of these charges on saving savings culture of banks customers, using Union bank PLC as a case study. With thinning interest margins due to increased competition at global level banks have resorted to another source of income, bank charges in a bid it improve on shareholder return on investment. This has resulted in banks loosing patronage to and the immergence of non-banking sector financial institutions. In the context of Nigeria Banks with Union bank as the case study, this has led to non-banking sector financial institutions (NBFIs) being observed as offering alternative banking avenues thus competing with banks in the provision of financial services. It is against this background that this research study has investigated whether bank charges are a key determinant to the bank/client relationship in Nigeria. Results derived from the study based on regression analysis indicate no significant association between bank charges and bank/client relationship thus suggesting that bank charges are not a significant threat to banks/client relationship and therefore not a threat to the relationship between banks and their clients in context of the Union bank plc. Enugu.

Table Of Content

Preliminary Page(s)

  • Title
  • Declaration
  • Approval
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of Content

Chapter One


  • 1.1 Background Of The Study
  • 1.2 Statement Of The Problem
  • 1.3 Objectives Of The Study
  • 1.4 Research Questions
  • 1.5 Significance Of The Study
  • 1.6 Scope And Limitations Of Study
  • 1.7 Definition Of Terms
  • 1.8 Organization Of The Study.

Chapter Two

Literature Review

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Review

Chapter Three

Research Methodology

  • 3.1 Introduction
  • 3.2 Research Design
  • 3.3 Research Settings
  • 3.4 Sources Of Data
  • 3.5 Population Of The Study
  • 3.6 Sample Size Determination
  • 3.7 Sample Size Technique
  • 3.8 Instrumentation
  • 3.9 Reliability
  • 3.10 Validity
  • 3.11 Method Of Data Collection
  • 3.12 Method Of Data Analysis

Chapter Four

Data Analysis, Results And Interpretation

Chapter Five

Summary, Conclusion And Recommendation

  • 5.1 Introduction
  • 5.2 Summary
  • 5.2 Conclusions
  • 5.3 Recommendations
  • Reference

Chapter One

1.0 Introduction

1.1 Background Of The Study

CBN exclusively regulates the activities of financial corporations and promotes the development of specialized or development-related financial institutions. The SEC is the central supervisory authority on the capital market. The Nigerian Stock Exchange (NSE) is an institution of self-regulation or user regulation. Issuers, registrars and investment dealers, who also interact with the money market, are making the capital chain more complex. The Federal Ministry of Finance and the CBN form the monetary authority and joint control of the bureau de change. NAICOM is the regulator in the insurance sector, while FMBN regulates mortgage financing activities in Nigeria. Saving is a current consumer sacrifice, which involves the accumulation of capital, which in the long run provides additional power that can be used for consumption in the future (Gersovitz, 1988). In other words, saving is the difference between current income and consumption. It was also defined as “latent consumption” or as a part of unspent income.

Savings are considered as a financial asset accumulated by public and private entities in the organized financial system. The expansion of financial savings requires the transfer of funds from the private and household sectors to the business or enterprise sector, which in turn leads to increased investment, income growth, employment and capital formation. This goal can not be achieved without increasing the savings rate, which Nigerians save. Due to high bank fees, low capital gains, insufficient investments in productive instruments and non-productive investments, gold, jewelery, income inequality and demonstration effects, etc. State of development of the aforementioned financial sector as well as the savings habits of the citizens. The increase in bank charges is one of the main causes of austerity, which will eventually lead to a slowdown in economic growth and economic development (Uremadu, 2006). The relationship between savings and banking fees has always been very close; hence the unsatisfactory growth performance of many developing countries. Example: Nigeria has been attributed to poor savings and bad investments. This weak growth has generally resulted in a dramatic decline in investment. Domestic savings rates have not improved and have thus exacerbated the already uncertain balance of payments situation (Chete, 1999). The role of savings in a country’s economic growth can not be stressed enough. Conceptually, savings is the portion of income that is not spent on current consumption.

Instructions in the financial sector, such as deposit banks / commercial banks, mobilize savings in an economy, the deposit rate must be relatively high and the rate of inflation must be stabilized to ensure a high positive real rate, which will encourage investors to save on their disposable income. In Nigeria, Nnann, Odoko and Englama (2004) consider that the amount of funds raised by financial institutions is quite small for a number of reasons, ranging from high bank charges to low savings rates due to bad habits or banking cultures. The banks’ attitude towards small savers is another obstacle to raising funds. Another limitation to the mobilization of savings is the fact that the concentration of banks and their offices in favor of urban areas is biased.

One of the reasons is that established banks underestimate the austerity measures to mobilize and invest in productive investments in rural areas. It is often argued that very few resources can be removed from income and consumption because the rural economy operates at an almost existing level. For this reason, it has not been found that there are large amounts of unused funds in rural areas, although small units per person. In Nigeria, there is a general lack of savings incentives that have a negative impact on savings. Some of these factors include: bad banking habits, bank attitudes to economies of scale, bad orientation, unemployment, instability of the political system, corrupt taxation system, instability of the banking system, we will closely monitor the impact of bank charges on savings

1.2 Statement Of The Problem

Further efforts are needed in Nigeria, in particular to mobilize small savings in urban and rural areas and the process of financial intermediation itself, as the saving culture in Nigeria is very poor compared to other countries. other developing countries (Uremadu, 2006). In this context, it was noted that in carrying out their tasks, commercial banks had the opportunity to mobilize funds and use them for investment. In view of the problems associated with the formal sector, informal Savings Banks Associations, if well developed, would not only facilitate the financing of economic development but also contribute to income development, leading to the establishment of a coherent economic policy. This creates the environment that we urgently need, and there is an urgent need to encourage Nigerians to change their current attitude towards saving.

Commercial bank charges for transactions become unbearable for customers, forcing some of them out of the banking business and causing institutions and regulators to influence budgetary decisions. Companies and authorities.

As mentioned above, as national policies become macroeconomic or microcosmic, variables are generated that may affect the economy’s and financial actors’ propensity to spend. This study could try to examine the magnitude and direction of variables such as interest rates, income, growth, urbanization, external trade (aid), fiscal policy, etc. from a political point of view. about savings in Nigeria.

1.4 Research questions

Therefore, this research question will try and answer the following:

  1. What are the charges Union bank PLC put on their transactions
  2. What are the factors that reduce savings in Nigeria?
  3. What impact do Union bank charges have on the savings culture of their customers?

1.3 Objectives Of The Study

In the light of the above problems, the objectives of this research work include:-

  1. To ascertain those factors that affect bank savings in Nigeria.
  2. To identify the various irregular bank charges made by commercial anks in Nigeria.
  3. To determine the effect of these charges on saving savings culture of banks customers, using Union bank PLC as a casestudy.

1.4 Statement Of The Hypothesis

The hypotheses to be tested in this research work are:

Hypothesis one;
  1. Ho; Union bank charges have no significant impact on savings in Nigeria.
  2. H1; Union bank charges have significant impact on savings in Nigeria.
Hypothesis two
  • Ho; there is a positive relationship between bank charges and savings Nigeria.
  • H1; there is no positive relationship between bank charges and savings in Nigeria

1.5 Significance Of The Study

This research will be extremely useful for policy makers, especially those involved in the development of Nigeria’s economic program. This will help raise the awareness of the masses about the different bank charges and the reasons for these fees and help the public to identify unfair fees. This will help them to choose the appropriate policy in the area of ​​macroeconomic policy management, especially those that have an impact on savings in Nigeria. In addition, the results and suggestions of this research work will create greater awareness in the financial sector or sectors to appreciate the impact of the Confederation. Government of Nigeria, through the Central Bank of Nigeria and the Federal Ministry of Finance, to improve its policy, which has had an impact on the savings achieved in recent years. Finally, this study will contribute modestly to broadening students’ knowledge of the practical and real situation of theories they learn in the classroom.

1.6 Scope And Limitations Of Study

The scope of this study is to estimate and evaluate the effect of bank charges on savings culture of customers. Using Union bank PLC as case study.

The Limitations are constrained to lack of fund, human error and limited time frame, which imposed difficulties when serious attempt to effect a general in – depth towards this study.

1.7 Definition Of Terms


A financial institution that accepts deposits and channels the money into lending activities.


A fund of money put by as a reserve

Bank charges;

Cost of carrying out banking transactions

1.8 Organization of the study.

This study is divided into five chapters.

Chapter one of the dissertation deals with the general description of the study, the definition of the problem, the research question, the objectives of the research and the importance of the study.

Chapter Two presents all the relevant bibliographical research on waste management and related concepts.

Chapter Three deals with the identification of the most appropriate research methodology for this research, and

Chapter Four provides an analysis of the data of the lessons learned in this field. Finally,

Chapter Five summarizes the findings, conclusions and recommendations.

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

This chapter covers the summary of the findings, conclusions that can be drawn from the analyzed data, recommendations.

5.2 Summary

In summary the objective of this study was to establish the effect of bank charges on customer saving culture a case study of union bank plc. Enugu. The study was able to establish this through a survey done via questionnaire that bank charges indeed has an effect on the saving culture among the residents of Enugu state. The achievement made so far by using the bank charges are many and there is still a lot of potential for growth in banking charges in Union bank so as to attain even greater benefits.

The average amount saved was regressed against the three variables. Data was collected and findings indicated that on the overall model summary the average bank charges on customers monthly. The study has achieved its objective to discover the effect of bank charges on the saving culture. It was found out that mobile banking services is now indeed by far the most preferred and dominant way of saving money among residents of Enugu town and has actually had a huge impact on the amount of money that is saved in the phones.

This study find substantial statistical significance of association between bank charges and banks/client relationship and therefore financial intermediation role. In the analysis rather, it was found that factors such as customers service and service experiences with their respective banks, alternative investments options, money keeping decisions and choice of bank; all being influenced by the level of bank charges, do not have a bearing on banks intermediation role in respect of customers’ perceptions. This further suggests that if the banking sector is alleged to be experiencing diminishing trend in its role of financial intermediation, then it could significantly be due to some factors other than either bank charges themselves or customers’ perceptions on bank charges. It is therefore against this background to conclude that banks in Nigeria stand a great chance of advancing and playing an effective financial intermediation role that can contribute remarkably to economic growth and development, thus reducing unemployment and poverty levels in the economy. In the further study around the same area, a different approach and methodology will be applied to sufficiently explore and measure primary factors influencing banks financial intermediation role from a macroeconomic perspective. Nonstructural methods of measuring concentration.

5.3 Conclusions

The study concludes that bank charges has an effect on the saving culture and as such with the improvement of the bank charges ; banking users are able to conduct banking services at any time and any place. Many banks in the world have provided mobile access to financial information. Understanding the effect of mobile banking on the saving culture is an important issue in this research. Nigeria mobile banking sector presents a delightful outlook of exploitation. The demands of bank charges revolve around to improved convenient business transactions, quality connection besides reduces cost so as ensure affordability to many without you coming to the bank.

5.4 Recommendations

From the finding of this study, it is recommended that the banking charges might be better of prevailing services at lower cost so as to net more users. By so doing they will be able to boost their revenues streams by promoting more transactions.

In order for the customers not to feel dissatisfied after paying bank whenever the perform a transaction, the service providers should work on the legal framework which will ensure that the recipient can be prosecuted if they withdraw the money or whenever they transact in their account, the money is deducted and the person is refunded.

The service providers could also make the features of using the service more users friendly so that the users don’t suffer from the technical problems while using the service. The cost of the banking charges was also found to be high to some of the respondents, a factor which limits the reach of the service.

It is also recommended that banking charges should be worked on by finding the ways through which float management can be undertaken. Information and education with respect to products and services should also be undertaken through various promotional and outreach programs.

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