Investigating the relationship between electronic banking and liquidity control in Refah Bank

Dissertation to receive master's degree in financial management

Abstract:

Along with the advancement of technology and due to the comprehensive connection of human life with communication technologies and especially the Internet, the banking system in all countries has undergone changes and transformations in the last century. All these efforts have been aimed at reducing the cost of capital and the cost of lost opportunities and increasing the efficiency of the investments made. In this regard, liquidity management of received funds is highly important. In this research, we sought to prove the hypothesis that the process of electronic equipment changes in Refah Bank of Iran had a direct effect on the improvement of liquidity management in Refah Bank. In this regard, after identifying the factors affecting the bank's liquidity in Refah Bank of Iran, the process of their changes in the period of 2014 to 2014 was investigated. Then, using the statistical software IBM SPSS Statistics 19, the effect of each on the liquidity index variables was tested. For this purpose, 38 sub-tests were conducted and finally it was concluded that the effect of the employed variables on the dependent variable of the main hypothesis was less than 50%.

Key words: Electronic banking, liquidity control, Refah Bank, electronic money

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Chapter one: General research

1-1. Definition of the problem

In recent years, the growing trend of using modern electronic payment tools in the country's banking system has been significant, while during this period the growth of liquidity in Iran's economy has greatly increased, and therefore it is believed that there is a relationship between the use of new electronic payment tools and the growth of liquidity, hence the purpose of this thesis is the effect of using new electronic payment tools (ATM, sales terminal and branch terminal) liquidity management in Refah Bank of Iran using monthly data in the five-year period from 1386 to 1390. 1-2. Importance and necessity of research One of the characteristics of the current century is the amazing development of information and communication technology and its use to increase the speed and quality of service delivery. Service quality and customer satisfaction are strategic issues for organizations. are considered services. Providing high quality services is essential for the survival and profitability of organizations. The need to understand and improve the quality of services has been considered due to the benefits of providing high-quality services such as customer retention, customer loyalty, attracting new customers, creating sustainable customer satisfaction, etc. for the organization. In today's competitive world, providing high quality services is a necessity for service organizations, especially banks. In recent years, the banking industry has undergone significant changes due to major changes and developments in the fields of technology and communication development. The expansion of electronic communications and the access of a large number of people in the world to the global Internet network has provided a suitable platform for establishing commercial and economic relations. This has increased competition in the banking industry and has brought about the provision of electronic banking services. Hence, according to the increase or decrease of this coefficient, the ability of banks to grant facilities changes.

According to the latest statistics published by the Central Bank, the monetary inflation coefficient in December 2018 compared to March 2018 shows an increase of 0.89 percentage points from 52.3% to 41.4%. This increase has led to an increase of 27 thousand 56 billion tomans in the volume of liquidity.

The volume of liquidity in this period shows an increase from 190 thousand and 137 billion tomans to 217 thousand and 192 billion tomans.

On the basis of this, the new lending power of banks in this period, due to the increase in the monetary multiplier and the deduction of legal reserves of the banks at the central bank, is a figure of It included 18 thousand and 866 billion Tomans. The above increase in the ability of money supply by banks has taken place while during this period we have faced a decrease of 8.8% of the monetary base. Among the reasons for the increase in the increasing coefficient in the first 9 months of 2018, we can mention the decrease in the ratio of cash to people's deposits..

This ratio shows people's preference for keeping a percentage of money in cash, as opposed to the percentage they keep in the form of cash deposits with banks.

According to the statistics of the Central Bank, the ratio of bank notes and checks in the hands of individuals to cash deposits during March 2017 to the end of December 2018 shows a decrease from 42.9% to 38.7%. This decrease is a reason for the increase in people's willingness to keep their cash in the form of demand deposits with banks.

Given that according to the monetary policies of the Central Bank, the legal reserve rate of banks in 1388 is considered to be the same as in 1387, and the monetary base also shows a decrease in this period. Therefore, the only reason for the increase in the multiplication factor, the volume of liquidity, and the ability of banks to expand in paying facilities (creating new money) in this category can be attributed to the increase in people's preference for keeping their cash in the form of demand deposits. In this regard, the control of banks' liquidity as an issue that has a direct impact on the risk of bank bankruptcy on the one hand and reducing their profitability in a situation where rival banks have benefited from better liquidity management, is of considerable importance. (Department of Economic Research and Policies of the Central Bank of the Islamic Republic of Iran, 2013)

1-3. Research Objectives

General objective: In this research, we seek to show what effect the expansion of electronic banking and the development of tools for using these systems (ATM, sales terminal, Internet, and branch terminal) has had on liquidity management in Refah Bank.

Subjective objectives: Investigating the current situation and the impact of actions taken in the past on the management of the bank. Liquidity of Refah Bank

Providing solutions for optimizing the use of electronic systems in order to increase liquidity efficiency in Refah Bank

Identifying the future trend and predicting the future path according to the current situation in Refah Bank

1-4. Research questions

Main questions:

Have electronic banking tools had an impact on liquidity management in Refah Bank?

Slight progress And to what extent has the quality of electronic banking tools had an impact on the proper management of Refah Bank's resources and expenses, cost control, and consequently increasing profitability?

Sub-questions:

What has been the trend of changes in electronic tools (cards, ATMs, sales terminals, branch terminals, etc.)? How were the loans received and paid with the Central Bank and other banks?

What were the changes in the branches' debits and credits during the period under review.

What was the trend of changes in liquidity and the amount of total assets of the branches during the period under review.

1-5. Research variables

Independent variable: electronic banking and especially the Rial volume of transactions made and its components (ATM, terminal) sales, phone banking, mobile banking, SMS banking, internet and branch terminals)

Dependent variable: changes in liquidity management in Refah Kargaran Bank of Iran. Here, liquidity is the amount remaining in the bank's fund at the end of the day, which does not earn any interest. According to common banking definitions, the amount of liquid assets in Refah Bank at the end of the day is the total of 6 items as described; 1- Fund, 2- Iran Central Bank check, 3- Current good loan deposit with the central bank, 4- Current good loan deposit with state banks/bank account, 5- Term deposit with domestic banks- Rial and 6- Facilities granted to banks. The bank's debt also consists of 3 items; 1- Deposits of current good loans of banks with the bank, 2- Deposits received from the central bank, and 3- Facilities received from domestic banks are obtained. The result of the difference between the bank's liquid assets minus the bank's debt on each day gives us the bank's liquidity at the end of the same day. which includes the dependent variable of this research.

1-6. Assumptions of the research

The spread of electronic banking, which in this research is the total amount of Rial transactions made in the time periods investigated by each of the electronic portals (ATM, sales terminal, telephone bank, mobile bank, SMS bank, internet and branch terminal), has had a positive effect on liquidity management in Refah Bank. On the other hand, it is possible to examine the growth of the number of each of these tools, as well as the number of transactions made in the period of time by each of these tools.