Title Page i

Certificate ii

Dedication iii

Acknowledgement iv

Table of Contents vi


1.0 Introduction 

1.1 Background of the Study 1

1.2 Statement of the Research Problems 2

1.3 Research Question 3

1.4 Objective of the Study 4

1.5 Research Hypothesis 5

1.6 Significance of the Study 5

1.7   Scope and limitation of the study 6

1.8 Definition of Key Terms 7

1.9Organization and Plan of the Study10


2.0Literature Review

2.1 Historical Background 17

2.2 Definition of Cash Management 22

2.3 Meaning of Fund Management 23

2.4 Cash Planning 24

2.5 Cash Budget 26

2.6 Function of Deposit Money Bank 28

2.7 Cash Balance Required 31

2.8 Cash Balance to Current Assets Ratio 32

2.9 Effect of Cash Management 32

2.10Need for Holding Cash34

2.11 The Creation of Money by Deposit Money       


2.8 Qualities Associated with Credit 38                                                 

2.9 Investment of Excess Cash42

2.11 Internal Control of Cash 43

2.12 Limitation of Credit Creation45


3.0 Research Methodology 50

3.1 Sources of Data Collection 51

3.2 Population and Sample Size 52

3.3 Sampling Technique 52

3.4 Method of Data Analysis 52

3.5 Limitation of the Study 53


Data Presentation, Analysis and Interpretation

4.1 Data Presentation 54

4.2 Five years financial summary for the 

Year 31st March, 2015.58


Summary, Conclusion and Recommendations

5.1 Summary 61

5.2 Conclusion 63

5.3 Recommendations 64

References 66




The Central Bank of Nigeria is a federal government bank. It is referred to as the father of all banks. The country as it is responsible for issuing currency and regulating the countries monetary policies. The Nigeria deposit money banks are controlled by the central bank through it clearing house. A system by which inter-bank through debtless is settled. There are twenty two banks in Nigeria with commercial bank account for more than half of numbers. Although deposit money banks in Nigeria carry out other banking functions they concentrate mostly on deposit banking. 

The management of fund is deposit money bank particular reference to Union Bank of Nigeria Plc is the topic reviews in the project. They make up of the firm’s capital structure the management of fund, motive of holding money, the firm financial statement to outsiders and its operation are the subject matter of the review.


In this era of bank distress management finds has been a matter of concern to banks and government even the customers. The statement of the research problems are as follows under the creation of credit, the deposit money bank ability of Union Bank PLC, Ilorin.

i. The monetary Authorities actions: the central bank has a number of measure that include, adjusting the bank ratio.

ii. Government Legislation: the withdrawal of government accounts restrict deposit money bank ability to create credit.

iii. The probability of cash drain of other bank.


The project work is intended to review the management of fund of commercial banks with particular reference to Union Banks of Nigeria Plc Ilorin.

As a result of this the following questions arise.

i. What are the banks sources and application funds?

ii. What constitute the bank’s capital structure?

iii. How does the bank manage its cash?

iv. What is the function of the bank regarding cash management?

v. What are the economy importances of banks?

vi. What are other kinds of service rendered by banks?

vii. What are the effects of environmental and structural change to?  


The objectives of the study are as follows:

i. To define the term fund management

ii. To identify the various function of commercial banks.

iii. To critically examine fund management in commercial banks.

iv. To appraise the problems encountered by banks in the management of it funds.

v. To ascertain the roles of commercial banks in business development.

vi. To make recommendation as to how commercial bank can manage it funds prudently.


In the courses of the research work, the following hypothesis will be tested H0: analysis of funds management do not provide a sound banking system in Nigeria Hi: Analysis of fund management provide sound banking system in Nigeria.


It is imperative to mention here that the topic ‘Analysis of Fund Management rare topic’.

This write up will help to receive the mind rating managers to the importance of managing fund as well as suggest to them better techniques to be used in the management of funds. The study will provide a frame work of knowledge that will assist the existing and potential commercial banks in Nigeria.

Commercial banks will find it useful in developing a good operation system of their banking activities. The knowledge of the study will no doubt contribute greatly to the mush take about economy as management of cash is a major factor in a country’s economy.


The scope of the study is to carryout on depth investigation into fund management in Nigeria deposit money bank using Union bank Plc Ilorin as a case management in providing the research project work, the following problems were encountered.

1. Luke warm attribute from respondent as they treat all information.

2. Embarrassment during the conducting or collecting information from the workers of Union bank.

3. Pressure of work for the workers of Union Bank. 


i. MANAGEMENT: This term used here in relation to fund. It include the process of safe-guarding cash, controlling cash and marketable securities forecasting cash requirement as well as appraisal of investment opportunities for cash and research items towards generating more profit.

ii. CASH: Define as money or legal tender that constitute negotiable instrument which could be used to settle any contractual obligation fund and cash can be used interchangeably.

iii. CHEQUE: A cheque is an unconditional order in writing whereby a person instruct his bankers to pay on demand a stated sum of money from his current account to a named person.

iv. LIQUIDITY: This is the nearness to cash of assets, it is the state of being able to raise fund easily by selling off the assets of a company.

v. FLOAT TIME: This is the length of time necessary for a cheque to make its way from the issuer to the player back the clearing process until the cheque is charge against the issuing account.

vi. SOLVENCY: This is the ability to meet debt payment on due date by having money available in firm of cash.

vii. BANK DRAFT: These are bill of exchange drawn by one banker to another. They firm a convenient means of remitting money.

viii. OVER DRAFT: This is the amount granted to a customer by the bank. The customer drawn more than what is inside his account.

ix. BILL OF EXCHANGE: It is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain of money to or the order of a specified person.

x. DORMANT ACCOUNT: This is an account which has not been operating for long (one year and above) no operation will be allowed on it including payment of interest until it is reactivated with an explanation to the bank by the customer.

xi. CERTIFED CHEQUE: This is cheque issue by the bank to a customer on demand with the work certified payment of a cheque is contain.

xii. MAIL AND TELEGRAPHIC TRANSFER: These means of remitting fund from one bank to another in different vocation.

xiii. BANKERS PAYMENTS: This is an instrument used to settle inter-bank payments within the same clearing town. It is usually presented throughout clearing house.

xiv. FUND: The term fund can be derive in three ways it mean (i) cash (ii) working capital (different between current assets and current liability) (iii) finance resource (arising from both current and non-current assets).


The study is divided into fine chapter, chapter one: is the introduction which contains background, statement of the problem, objectives, significance of the study, research question, scope, organization of the study and the definition of the key terms.

Chapter two: it deals with literature review which contains definition of cash management, meaning of fund management, function of commercial banks, fact of cash management, cash planning cash, budget cash flour statement, cash balance required and limitations to credit creations.

Chapter three: is research methodology which contains historical profile of Union Bank of Nigeria Plc Ilorin, Data Analysis, Population and Sample Size and Sampling techniques.

Chapter four: is data presentation and analysis.

Chapter five: consist of the summary, conclusion and recommendations. 



There have been the growing concerns and controversies on the role of the stock markets on economic growth and development (Oyejide 1994; Levine and Zerros 1996; Demirgine Kunt and Levine 1996; Nyong 1997, Obadan 1998; Sule and Momoh 2009; Evah, Esang and Basey 2009;) there have been mixed results; while some are in support of a positive link some negative link and other do not find any empirical evidence to support such conclusion. For instance: Aye and Jovanovic (1993) found in a cross-country study of stock and economic growth of 40 countries from 1980 to 1998 that there was a significant correlation between the average economic growth and stock market capitalization.

Levine and Zervos (1996) examined whether there was a strong empirical relationship between stock market development and long-run economic growth. They found a strong correlation between overall stock market development and long-run economic growth.

Demiurgic-Kunt and Levine (1996) using data from 44 countries for the period 1986 – 1996 found the different measure of stock exchange size are strongly correlated to other indicator or activity levels of financial, banking, non-banking institution as well as to insurance companies and pension funds. They concluded that countries with well-developed stock market tend to also have well-developed financial intermediaries.

Again Demiurgic-Kunt and Maksi-Movic (1998) have show and re-emphasized the complementary role of the stock market and banks that they were not rival or alternative in tuitions using 30 countries from 1980 to 1991, Levine and Zervos (1998) used pooled cross-country tune series regression of 47 countries from 1976 to 1993 to evaluate whether stock market liquidity is related to growth, capital accumulation and productivity.

They towed the line of demiurgic-Kunt and Levine (1996) by conglomerating measure such as stock market size, liquidity and integration with world market, into index of stock market development. The rate of Gross Domestic Product (GDP) per capital was regressed on a variety of variables designed to control for initial conditions political instability, investment in human capital and macro-economic condition and then, included the conglomerated index of stock market development. They found empirically that the measures of stock market liquidity were strongly related to growth capital accumulation and productivity while stock-market size does not seems to correlate to economic growth.

Nyong (1997) developed an aggregate index of capital market development and used it to determine its relationship with long-run economic growth in Nigeria. The study employed a time series data from 1970 to 1994. Four measures of capital market development ratio of market capitalization to GDP (in %) ratio of total value of equities transactions relative to GDP and listing were used. The four measures were combined into one overall composite index of capital market development using principal component analysis. The financial market depth was included as control. It was found that the capital market development is negatively and significantly correlated with the long-run growth in Nigeria. Demiurgic-Kunt and Maksimovic (1998) citied in Henry (2000) found a relationship between economic growth and the stock market activity in the field of transmission of security (secondary market) more than in funds channeling (primary market).

Barlett (2000) demonstrated that a raising stock price raises the wealth of the economy (wealth effect) by encouraging increases in consumers consumption and increase in investment.

Ewan et al (2009) appraise the impact of the capital market efficiency on the economic growth of Nigeria using time series data from 1961 to 2004 they found that the capital market in Nigeria has a potential of  growth inducing but it has not contributed meaningfully to economic growth of Nigeria because of low market capitalization, low absorptive capitalization, liquidity, misappropriation of funds among others. Harris (1997) did not find hard evidence that stock market activity affects the level of economic growth.



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