CBN CASHLESS POLICY AND FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA: Evidence from Internet Banking

Abstract

This study examines the effect of the Central Bank of Nigeria's (CBN) cashless policy on the financial performance of deposit money banks in Nigeria, focusing specifically on the Internet Banking (IB) electronic banking channel. The study is guided by two specific objectives, namely: to ascertain the relationship between Internet Banking and Return on Assets (ROA), and to investigate the relationship between Internet Banking and Earnings per Share (EPS). Anchored on the Diffusion of Innovation Theory and the Technology Acceptance Model, the study adopted an ex-post facto research design using secondary data extracted from the audited annual reports of ten deposit money banks listed on the Nigerian Stock Exchange over the period 2012 to 2019. Simple linear regression analysis was used to test two null hypotheses at the 5 percent level of significance. The findings reveal that Internet Banking exhibits a negative and statistically insignificant relationship with ROA, but a positive and statistically insignificant relationship with EPS. Neither of the two hypothesised relationships was found to be statistically significant at the 5 percent level, suggesting that, within the period reviewed, the internet banking channel is yet to translate into measurable improvements in the profitability of Nigerian deposit money banks. The study concludes that the financial-performance benefits of the internet banking channel remain latent rather than realised, and recommends improved digital infrastructure, network reliability, and sustained public enlightenment to strengthen its contribution to bank profitability.