NUBAN: Banks record drop in operating cost

As Deposit Money Banks move to fully implement the Nigerian Uniform Bank Account Number Standard Scheme, indications have emerged that the banks are beginning to witness some reduction in operating cost.Our correspondent gathered that the cost reduction was derived from the efficiency of the automated clearing house system of the banks since the scheme took off this year. It was also gathered that the new account number scheme had facilitated better electronic payments among banks, which was cost effective compared to cheque payments.Information made available to our correspondent stated that it had helped to implement the electronic payment directive of the Federal Government to ministries, departments and agencies, thereby reducing operating cost among the banks.The Federal Government had directed its MDAs to replace all forms of cheque payments with electronic payments with effect from January 1, 2009. From that date, rather than issue cheques to settle their obligations, all payments by MDAs were made through direct transfers to beneficiaries accounts.Consequently, there was unprecedented increase in the volume of automated direct credits at the Bankers Clearing House. There was also a decrease in the number of complaints about the inefficiency of the Clearing House System by banks and their customers. A statement made available to our correspondent quoted a manager with one of the banks as saying, The old number scheme which was hardly efficient, was of concern to the Central Bank of Nigeria and other stakeholders, with cost rising in the industry and dragging down the pace of Automated Clearing House operations. But today, the introduction of the new number scheme has commenced the cutting down on the operating cost of banks.It quoted another top official in the banking sector as saying, ``The initial challenges to the NUBAN were increasing cost of clearing, occasioned by the dragging down of the pace of transactions, but as of today those issues have been resolved. The new number scheme has been able to address various complaints ranging from payments into wrong accounts resulting from wrongly quoted account numbers by customers and the difficulty and lateness experienced in reversing such errors.He pointed out that the other issue resolved was abuse of the clearing system, which included delays in presenting customers instructions in the clearing house, delayed application of inward items by some banks and late return of unapplied inward items.
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