CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The advent of financial innovation such as smart card, credit card, electronic transfers in the payment system and recently the lunching of internet banking have transformed the world into a global village linked with electronic impulses. The concept of electronic money in Nigeria was introduced in 1990 when the Central Bank of Nigeria (CBN) gave approval to them. All state Trust Bank limited to offer a financial product known as smart card. Subsequently, Diamond Bank play card. However, the smart card scheme received uplift in February, 1998 when a consortium of a licensed bank surfaces a smart card company in Nigeria which is known as Smart card Nigeria plc with a mandate to producers and manages cards issued by the member bank of the consortium. Another consortium of more than 20 bank under the patronage of Gen card became operational in year 2000.

These innovations, which are still at a relatively early state of development have postnatal to challenge the predominate role of cash for making small value payments and make retail transactions easier and cheaper for consumers and merchants who are account holders.

However, they also raised a number of policy issues because of the possible implication for Central Bank monetary policy consumer system etc.

In responses to implication technology development in the domestic financial sector, the Central Bank of Nigeria commissioned and information technology strategy study in 1991 with the objective of promoting efficient performance of its statutory duties. The product is being implemented in phase and both the licensed banks and the regulatory authority here demonstrated their appreciation of benefit derivable form the application and use of the information technology.

In view of foregoing, the Central Bank Governors of the group of ten (G-10) country commission a series of studies on specific issues related to electronic banking in Nigeria. Therefore, the objectives of the research are to ascertain the role of electronic banking in Nigeria by using Guaranty Trust Bank (GTB) Plc, Ogui Road, Enugu as the case study.