IMPACT OF NIGERIA’S CURRENCY REDESIGN POLICY ON THE PERFORMANCE OF SELECTED DEPOSIT MONEY BANKS IN NIGERIA.

Abstract

The impact of Nigeria’s currency redesign policy on the performance of Deposit Money Banks (DMBs) in Nigeria is a multifaceted issue that presents numerous challenges for policymakers and banking industry practitioners. This study investigated the impact using a descriptive research design, with a population of 302 employees from five selected DMBs in Abuja, from which a random sample of 172 respondents was selected. Primary data were collected through questionnaires administered to the employees, and the gathered data were analysed using descriptive statistics and research hypotheses was tested using regression analysis conducted with SPSS version 27.0 to test the formulated hypotheses. The results revealed a significant positive relationship between the cost of currency and the operational efficiency of DMBs. The study concludes that it is crucial to assess both the benefits and costs associated with the currency redesign and to continuously monitor the performance of DMBs in the Federal Capital Territory (FCT) and other regions, ensuring that these banks contribute to the development of a robust and inclusive financial system. Based on these findings, it is recommended that DMBs implement targeted cost management strategies to mitigate the financial burden imposed by the currency redesign, including optimizing operational processes, leveraging technology to minimize manual interventions, and negotiating with suppliers for cost-effective currency-related materials. Additionally, banks should consider diversifying their revenue streams to cushion the impact of increased currency costs.