Nigerian banks are taking on next level innovation in today’s digital age, as deposit money banks have adopted the new National Automated Clearing System (NACS), a development fostered by Nigeria Inter-Bank Settlement System (NIBSS) and Precise Financial Systems (PFS).
This new innovation allows cheques to clear within hours or less. BusinessDay finds that since the banks started test-running the infrastructure 11 weeks ago, a total of N5 trillion worth of cheques from 10 million transactions have been processed through the new platform.
At the post go-live session in Lagos with representatives of banks, Ade Shonubi, managing director of NIBSS, explained that the institution had been on the project for over 18 months, saying the infrastructure would allow all the banks to achieve several payment and non-payment transactions.
Shonubi said as of today there were four clearing sessions, and the advantage of having multiple clearing sessions was that the net amount against each bank was smaller so that risks were managed.
“With the new system, a cheque can be cleared within six hours, four hour or at whatever duration we agree,” he said.
Yele Okeremi, managing director of PFS, the software firm behind NACS, at the session, said the process of clearing cheques in all Nigerian banks had been simplified with the launch of NACS and that the successful completion of the project had the door for more Nigerian firms to take on more national challenges.
Okeremi commended the collaborative effort that exists between NIBSS and PFS, saying that the partnership has given birth to the new system that “allows bank customers to experience the benefits of shorter cheque clearing cycles, as it reduces operational cost of the banks because the clearing departments of the bank can work smarter and close earlier.”
Expatiating on the reasons for the innovation, he said NIBSS needed a future proof system that would help the institution to realize its vision of a faster and more efficient clearing system that would be less resource intensive and accommodate various new requirements and practices in the clearing system.
“NIBSS wanted a system that can be incorporated with the Bank Verification Number [BVN]. They also wanted a situation where they would have a session-less system that would always be online such that banks could transmit their transactions as soon as they happen rather than a batch system that opens up at specific times and closes after stipulated time frames,” he said.
Kolawole Aminu, head, domestic payments and collections, Union Bank, said the platform was user friendly.
“With this new innovation, we are far ahead from where we used to be. Today we do clearing in a very simple form and has greatly improved the TAT for all banks especially with the session less clearing which means a bank can process transactions 24 hours a day, everyday,” he said.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
