Resources are scarce both locally and internationally, but this contrasts sharply with the human factor’s tendency to waste and underutilize them in the production of goods and services. It has been noticed that, with more and more businesses springing up every day in nearly every field, only the strongest of these businesses will be able to survive the market’s expanding rivalry. As a result, every company is required to produce at the lowest possible cost in order to stay in business while simultaneously achieving the corporate goals of profitability and survival. Under the circumstances described above, a realistic planning of the firm’s actions is critical, taking into account limiting variables and objectives.

A budget, according to the Oxford Advanced Learner’s Dictionary, is an estimate or plan of money available to someone and how it will be spent over a period of time. As can be seen from the definition above, a budget will take into account the existing resources before establishing a strategy for their use. It’s fascinating to learn that a budget is merely a plan that cannot be implemented by itself. Implementation is essential for budget realization. Budgets are required to aid in the actualization of the set plan by allowing for the control and monitoring of any variances in actual results from those budgets.

Budgetary control, according to Batty (1982), is a system that uses finances to plan and regulate operations. There are programs in place to promote domestic economic liberalization, operational efficiency, productivity growth, the development of privately owned businesses, economic growth, trade, and investment. Economic liberalization policies have cultivated an open economy and reduced the barriers that the banking industry faces in obtaining raw materials, inputs, and other resources for productive activities. However, it has resulted in a sea change in their business environment, both domestically and in terms of imports into the country. To remain competitive in the business environment, banking industries must establish and implement a well-thought-out strategy plan.


Budgets have long been used to assess an organization’s efficacy or performance; how well they are used can make or break the organization’s efficiency. This study is based on this concept, and it aims to evaluate its effectiveness in the areas of planning and control, with a focus on Guaranty Trust Bank Plc.


The study’s goals are as follows:

i. to see if budgets are set and followed in the banking industry; ii. to see if budgets are set and followed in the banking industry;

ii. to look into management control practices in terms of budgets as a management control instrument;

iii. to figure out why budgets aren’t always followed through on;

iv. to determine the efficacy of budgeted control in achieving budgeted outcomes;

v. to encourage banking industries to seek budget realization through the effective use of planning and control.


I have a hypothesis.

H0: In the banking industry, budgets are rarely pursued.

H1: Budgets are frequently pursued in the banking industry.

Hypothesis No. 2

H0: Budgets are difficult to come by in the banking industry.

H1: In the banking industry, budgets are frequently met.

Hypothesis No. 3

H0: In the banking industry, budgets are not an aid to achieving company objectives.

H1: In the banking industry, a budget is a tool for achieving corporate goals.


The findings from the study would also be found useful by banking industries in their achievement of their corporate objectives. Potential industrialists would also find the study useful in order to penetrate the market and remain therein.


Due to time constraints and deal cost penalties, the scope of the study would be confined to just one banking institution (Guarantee Trust Bank) as the case study (GTB).

  Definition of Terms and Abbreviation

The following are definitions for the technical words and abbreviations used in the study:

1. Variance is the difference between the budgeted or intended outcome and the actual outcome. That is, the variation.

2. Industry: A grouping or aggregation of all the businesses that produce similar goods for the same market.

3. Firms: A firm is a self-contained corporate entity that coordinates the production of goods and services.

4. The Association of Accounting Technicians (AAT) is a group of accountants who work in the field of accounting

5. Chief Executive Officer (CEO):

CIMA (Chartered Institute of Management Accountants) is a professional organization of management accountants.

7. Shareholders: Individuals who have purchased stock in a corporation.

8. Operating capital: This is the amount of money a company needs to run its day-to-day operations.

9. Capital-intensive: entails the use of more equipment than manual labor.

GDP stands for Gross Domestic Product.

PLC stands for Public Limited Company.

12. Depreciation: This is the amount set aside to account for asset wear and tear, such as equipment used in operations.

The American Mangers Association (AMA) is a professional organization that represents managers in the United States.

14. Ceteris Paribus: If all else is equal,

15. Infrastructural: As stated below

16. As previously stated

17. Relevant Cost: This is the cost that is relevant in calculating the cost price of goods and services, as well as their selling prices.

18. Marginal Costing Approaches: These are techniques for setting selling prices that only evaluate variable costs; contribution is used to write off fixed costs.

19. Contribution: The difference between the selling price and the variable cost is the contribution.

Selling Price + Contribution = Variable Cost

S – V = C

20. Limiting Factor: This refers to any factor that restricts your ability to achieve your goals.

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