EFFECT OF AUTOMATED CLEARING SYSTEM ON BANK PERFORMANCE IN BANKING ( A CASE STUDY OF UNITED BANK OF AFRICA IWO ROAD BRANCH)

ABSTRACT

To start with, the goal of every operation staff is to deliver quality service and in the process excite the customer.

Through information given it is obvious that automated clearing system in Nigeria has improved payment service. The purpose of clearing banks to make the process more manageable. Method used in this project work has been arranged and design in a meaningful way so that it will be obvious to anybody that come across this project.

The effect of automated clearing system has been stated in a clear times like strong of data and vital information. It also promoted effective control through tracking and reconciling items and also the benefit of the system has also been stated in a event between automated clearing system and special clearing system so as shed more light on the topics for proper understanding.

CHAPTER ONE

GENERAL DESCRIPTION OF THE STUDY

1.0     INTRODUCTION

The cheque clearing system is the means whereby bank exchange cheque drawn each others through clearing system. Clearing system on the other hand is the medium through which proceeds of cheques and other payment instrument are transferred from the paying bank to collecting bank.

The Nigerian automated clearing system (NACS) which book-off on October 21, 2002 as a result of the time function that affects clearing system i.e before cheque is cleared. It involved much stretch in which cheque is not cleared at when needed.

The Central bank of Nigeria (CBN) act No 24 of 1991 empowers the apex bank to facilitating the clearing of cheque and other payment instruments. As a movement forward on the execution of the mandate (CBN) issued the Nigeria banker’s clearing house rule on January 2, 1995. In November 1995 (CBN) governor announced a plan for a dratie overall of the clearing system monetary transaction in Nigeria were largely based on cash and as such had inherent problems, such as security volume of paper its transport, currency sorting changing.

 This state of affair creates the moving member of the public to non – cash payment instruments was hampered by the clearing processes, which was largely manual, the services to the customer was prior and cheque based on transaction were use prone to fraud “the clearing circle look between 5 to 15 working days”.

The clearing process was very rowdy with too many banks participating on clearing. The process was frequently late in balancing the book and prone to human awor.

This made it very difficult for central bank of Nigeria (CBN) to calculate and advise on the net settlement figures on time after the days clearing. Although many of the instrument had magnetic character recognition (MICR) code them the lack of automated meant that MIC code lines and infrastructure would not be used.

This meant a waste of consideration investment made in the form of magnetic link character recognition (MIRC) code line information processing infrastructure to fund solution to the problems a committee was set-up its report formed the basis of the banker’s committee decision on June 16, 1996 which approved the automated of the clearing process to more zone within the country with Lagos having more zones” reduce the number of clearing days to buster consumer confidence and encourage. The uses of non cash instrument also reduce number of clearing bank to make the process number of clearing bank to make the process more manageable, faster it was reasoned that automated would make used of [MICR] technology possible, which would further bring speed and efficiency into clearing processing with the potential to reduce the clearing float that introduce networking between the parties involved in clearing these was expected in unlock the benefit of electronic banking for Nigerians.