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It is a known fact that the financial sector reform is an essential ingredient in the economic growth and developmental process of every nation. This is clearly underscored in the literature linking the growth in financial sector with national economic growth. Hence the financial sector is regarded as the pivot of every economy. In recognition of this fact, managers of the Nigerian economy have targeted the banking sector as a channel for implementing economic policy reforms and policy shift to enhance its developmental process. Consequently, in January 2012, such economic reform in the Nigerian financial sector was exercised with the formal introduction of the cashless economic policy. The interest which the policy generated is hardly surprising considering the enormous implications its application will have on the lives of the ordinary Nigerians and the business environment. What are the benefits and challenges of this policy vis-a-vis the cash based policy and how has the banking industry performed under the policy? Against this backdrop, this paper appraises the performance of Nigerian banking industry given the adoption of the cashless economic policy in Nigeria vis-a- vis the cash based period with a view to x-raying the possible challenges and benefits which it poses to the Nigerian economy. Data utilized were sourced from the published annual reports of sampled banks and analytically, the study employs thet-test analytical technique to test whether there is a significant difference in the performance of bank in Nigeria before and after the adoption of the cashless policy.. The study found out that though the cashless policy is not a policy designed to enhance bank profitability but it has a lot of benefits associated with it which include; increased convenience; reduced risk of cash related crimes; reduced cash handling cost, reduced revenue leakages among others. However, the policy is beset with challenges which include; infrastructural deficits, erratic power supply, prevalence of e-fraud, high illiteracy level among others. It is recommended that the Federal Government of Nigeria and the Central Bank of Nigeria should synchronize their efforts in ensuring cyber-safety which is a major threat to the e-payment system in order to fully harness the smiles of cashless policy in Nigeria. Therefore, Nigerian banks should utilize the benefits of the cashless policy and engage in efficient financial intermediation for enhanced bank profitability. Further, appropriate infrastructures such as improvement on the power sector should be made to enhance the smooth operation of the policy.

Cashless Economic Policy in Nigeria: A Performance Appraisal of The Banking Industry.