ANALYSIS OF CASH DEPOSIT PATTERN IN COMMERCIAL BANKS : A CASE STUDY OF FIDELITY BANK PLC, AUCHI

INTRODUCTION

A bank is a financial institution that accepts deposits from the public and creates credit (Western Cengage, 2009). Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries. Most nations have institutionalized a system known as fractional reserve banking under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords.

Banking in its modern sense evolved in the 14th century in the prosperous cities of Renaissance Italy but in many ways was a continuation of ideas and concepts of credit and lending that had their roots in the ancient world (Goldthwaite, 2005). In the history of banking, a number of banking dynasties notably, the Medicis, the Fuggers, the Welsers, the Berenbergs and the Rothschilds have played a central role over many centuries. The oldest existing retail bank is Banca Monte dei Paschi di Siena, while the oldest existing merchant bank is Berenberg Bank.

STATEMENT OF THE PROBLEM

Cash-deposits and withdrawals are the main determinant of banks financial status. In a highly competitive industry like the banking sector, this issue posses some serious challenges and responsibilities to baking sector which also the fidelity bank plc Auchi is a victim. What is their recorded cash-deposit level and level of financial base? Do these records not measure up to the standard that merited them their position in the financial or banking sector? Analysis made on the cash-deposits transactions are only information services, and as such must be conditioned by the process to which they are applied unless that may only lead to false sense in the industries. It is in the light of these questions that I wish to carry out this research.

1.3     AIM/OBJECTIVE OF THE STUDY

1. To examine the cash-deposits pattern of fidelity bank, which forms the basis for its growth.
2. To determine the trend of its cash-deposits rate and use it to forecast future estimates.

• To deseasonalize the data on cash-deposits.

1. To offer suggestions and remedies for improvement on banking.