IGHOROJE Ese James
Department of Finance, Southern Delta University Ozoro.
Abstract
Cashless policy was introduced to modernize the payment system, reduce the cost of cash handling, curb illicit financial flows and drive financial inclusion. The study examined Central Bank of Nigeria’s Cashless Policy and soundness of deposit money banks in Nigeria, Specifically, the study assessed the impact of automated teller machine transactions on the capital adequacy ratio of deposit money banks in Nigeria. Evaluate the impact of point of sale transactions on the capital adequacy ratio of deposit money Banks in Nigeria and determine the impact of Internet Banking transactions on the capital adequacy ratio of deposit money banks in Nigeria. The study employed an ex-post facto research design The population of this study consists of all deposit money banks operating in Nigeria. The study employed the Generalized Linear Model (GLM) as the prime analytical technique. The results indicate that automated teller machine transactions has positive and significant effect on capital adequacy, Point of sale transactions show strong and consistently negative effect on capital adequacy. Internet banking transactions exhibit a positive and statistically significant influence on capital adequacy. Mobile banking transactions has the most substantial and statistically significant positive effect on capital adequacy. The study concludes that digital banking channels significantly influence the capital strength of deposit money banks in Nigeria. Among the recommendations is that banks should continue to invest in automated teller machine transactions infrastructure, enhance accessibility, and improve system reliability to sustain their positive effect on capital adequacy. Banks should evaluate the cost-efficiency of poin of sale operations, strengthen fraud prevention mechanisms, and implement monitoring frameworks to mitigate their negative impact on capital adequacy. Banks should improve the security and functionality of internet banking platforms and promote customer awareness to increase usage and maintain their positive contribution to capital strength. Banks should prioritize the expansion of mobile banking services, optimize mobile app performance, and integrate innovative financial solutions to reinforce its strong positive influence on bank soundness.
Key Words: cashless policy, financial soundness, deposit money banks, Nigeria