Legal SecurityBack

 

The need for a fast and efficient way of banking is increasingly becoming invaluable to financial transactions. The internet being the main tool for global sharing of information, communication and processing of transactions, uniting the world into a single niche where information and transactions are processed and completed within split seconds with little or no need for physical interactions.

 

Previously, the system of banking in Nigeria could not compete with those of developed countries of the world. The banking sector was still basking in an era that could not meet with international standards, demands and e-commerce. Some of the challenges of the previous structure were: -

 

  • delay in transactions;
  • huge cost;
  • queues at banking halls; and
  • lack of legal security for transactions.

 

However, the Central Bank of Nigeria in 2011, in a bid to improve the banking industry and fast track the internet banking system introduced a policy known as the ‘cashless banking’. By this, a limit was placed on the amount of money one could withdraw from the bank. This has enabled the banking sector in Nigeria to take a huge leap towards a more efficient and speedy system of banking. The policy was introduced with three cardinal objectives which includes: -

 

  • driving the development and modernisation of the payment system in line with vision 2020;
  • reducing the cost of banking services and driving financial inclusion by providing more efficient transaction options and greater reach; and
  • improving the effectiveness of monetary policy in managing inflation and driving economic growth.

 

 

Legal Security in E-Banking

 

As much as the internet is central to e-banking, so is security central to monetary dealings. Thus, the unpredictability of human behaviour especially in pecuniary issues makes legal security a necessity in every given transaction whether on the internet or not. The internet, being a peculiar environment, makes it extremely desirable for some sort of legal assurance in transactions. Hence, in Nigeria, the law has been modified to suit the e-banking system by the allowance for the admissibility of computer generated evidence by virtue of section 84 of the Evidence Act, 2011.

 

Although section 84 of the Act was not made solely for internet banking, however, it is beyond any shadow of doubt that its impact on the banking sector will be profound given the numerous financial transactions that now take place on the internet on a regular basis.

 

Utilising E-Banking

 

Given the fact that investors are result driven and place much emphasis on efficiency, it is very important that they enjoy the healthy e-banking environment that now exist in the Nigerian banking industry which hitherto, was not on ground. Some of the obvious reasons why financiers should make use of internet banking in Nigeria are:

 

  • legal security of transactions by virtue of the introduction of the computer generated evidence and its admissibility;
  • speed of processing and completion of transactions;
  • time and cost;
  • modernised and more comfortable payment system;
  • ease of multi-jurisdictional and trans-border transactions;
  • reduced need for mobility in financial transactions; and
  • certainty of transactions.

 

Consequently, it  means that the banking system in Nigeria with the introduction of online banking is moving at an unprecedented pace and will be able to compete with the best international banks in the world in the foreseeable future.

 

by David Okorogba

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