Effect of Regulatory Policies on the Economic Sustainability of Deposit Money Banks in Enugu State

• Post by: airjournals
• August 20, 2025
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Authored by
Ugochukwu, Loveth Ngozi PhD¹, Cyrus Apeh Abah², & Sunday, Ikechukwu Emmanuel³  

¹Department of Business Administration, Enugu State University of Science and Technology, Nigeria
²Department of Project Management, Enugu State University of Science and Technology, Nigeria
³Department of Business Administration and Management, ESUT Business School, Nigeria

Abstract The study evaluated the effect of regulatory policies on the economic sustainability of deposit Money Banks in Enugu state. The specific objectives are to: Examine the effect of capital adequacy on the cost reduction, and ascertain the effect of financial reporting on the operational efficiency of deposit Money banks in Enugu state. The area of the study was Enugu State. The study used the descriptive survey design approach. The primary source of data was a questionnaire administered. A total population of 282staff was used. 227 staff returned the questionnaire and accurately filled. Data was presented and analysed using mean and standard deviation, and the hypotheses were tested using a Z-test. Capital adequacy had significant positive effect on the cost reduction; Z (8.287, P. < .05) and financial reporting had significant positive effect on the operational efficiency of deposit Money banks in Enugu state, Z (9.110, P. < .05). The study concluded that Capital adequacy and financial reporting had significant positive effect on the cost reduction and operational efficiency of deposit Money banks in Enugu state. The study recommended, among others, that to enhance cost reduction through capital adequacy, Deposit Money Banks (DMBs) in Enugu State should adopt proactive capital planning and efficient risk-based asset allocation strategies. Capital adequacy, which ensures that banks maintain sufficient capital to absorb losses and remain solvent, can significantly influence the cost structure of banks when managed effectively. Keywords: Capital Adequacy; Cost Reduction; Financial Reporting; Regulatory Policies; Sustainability