Impacts of monetary policy on the performance of DMBs in Nigeria Research Papers (original) (raw)

Electronic banking services are provided by virtually all the Deposit Money Banks (DMBs) within Yenagoa metropolis, with the aim of decongesting the banking hall and providing a convenient and satisfactory services to customerss. Yet, bank customers experience delayed services, as the banking halls and ATM stands are always crowded. This study therefore, investigated the impact of e-banking service quality on customers satisfaction in Yenagoa
metropolis. Survey data was collected from 186 customer (respondent) of the 15 DMB, in the study area. Both correlation and regression analyses were used to analyze the data. Findings showed that customers are relatively satisfied with quality of e-banking services (accessibility, convenience, speed and security), but were dissatisfied with the fees/charges compared to quality of services provided by the banks. The result showed that accessibility, convenience, speed and security have significant positive impact on customers’ satisfaction. On the other hand, fees/charge has a significant inverse relationship with customers’ satisfaction. It is thus, recommended among others for DMBs, to reduce their fees/charges on e-banking services, this would lead to greater patronage of the e-banking services. This in turn will lead to decongestion of the banking halls and greater customers’ satisfaction.
Keywords: E-banking, Customers’ satisfaction, DMBs, Fees/Charges, Bayelsa State, Nigeria

DMBs are the major conduit for the monetary authority monetary policy transmission in Nigeria and the effectiveness of the monetary policy in the economy is contingent on their performance. Consequently, the study was carried out to determine the impact of monetary policy on the performance of DMBs in Nigeria. Annual data of the 17 DMBs in Nigeria was used for the period of 2013 to 2019. A causal research design was adopted with a census sampling technique. Monetary Policy Rate (MPR), Exchange Rate (EXR), Money Supply (M2), Cash Reserve Ratio were used as proxies for monetary policy (the explanatory variables) while Return on Equity (ROE) was used as a proxy for DMBs performance (the explained variable), and bank size (M) was used as a moderating variable to determine the moderating impact on the relationship between monetary policy and performance of DMBs in Nigeria. Diagnostic tests conducted include the Shapiro Wilk normality test, the Harris-Tzavalis Unit Root test, Pearson Product Moment Correlation test, Breusch-Pagan and Hausman tests for the determination of the appropriate model. The study made used of panel regression model and the random effect model was adopted based on the Hausman test conducted. The findings of the analysis revealed that MPR, EXR and CRR have negative impacts on the performance of DMBs in Nigeria however, only EXR is not significant at the 5% level of significance while M2 has a significant positive impact on performance. The moderating variable of bank size also showed a weak significant positive impact on the performance at 10% level of significance with the effect of moderating the magnitude of all the monetary policy instruments. Also, significant positive interactions were discovered between MPR and bank size as well as M2 and bank size. It was therefore recommended that the monetary authority should tread with caution in manipulating the monetary instruments to achieve certain macroeconomic objectives so as not to impact heavily on DMBs performance while DMBs management were advised to be conscious of the monetary policy and strategize ways to improve in their performance, amidst adverse policy prescriptions, which is only possible with a competent management team.