Appraisal Of Clearing System In Nigeria Banking (A Case Study Of Central Bank Of Nigeria)

Project and Seminar Topics with material for Banking and Finance

Appraisal Of Clearing System In Nigeria Banking (A Case Study Of Central Bank Of Nigeria)


Table of Contents


  • Cover Page
  • Certification
  • Dedication
  • Acknowledgment

Chapter One

1.0 Introduction

  • 1.1 Statement of the Study
  • 1.2 Objectives of the Study
  • 1.3 Research Hypothesis
  • 1.4 Scope of Study
  • 1.5 Definition of Key Term
  • 1.6 Plan of the Study

Chapter Two

2.0 Literature Review

  • 2.1 The Manual Clearing System
  • 2.2 The Nigeria Automated Clearing System (NACS)
  • 2.3 Objectives of the Nigeria Automated Clearing System
  • 2.4 The Participant Of Nigeria Automated Clearing System
  • 2.5 Problems and Challenges of Nigeria Automated Clearing System
  • 2.6 Types of Cheques and Its Crossing
  • 2.7 The Rules And Regulation Guiding Clearing House
  • 2.8 Accounting Procedure of Clearing House

Chapter Three

3.0 Research Methodology

  • 3.1 Historical Background of Case Study
  • 3.2 Source of Data
  • 3.3 Population of the Study
  • 3.4 Method of Data Collection
  • 3.5 Method of Data Analysis
  • 3.6 Limitation of Research Methodology

Chapter Four

4.0 Data Presentation, Analysis and Interpretation

  • 4.1 Data Presentation
  • 4.2 Data Analysis
  • 4.3 Testing of Hypothesis
  • 4.4 Interpretation of Results

Chapter Five

5.0 Summary, Conclusion and Recommendations

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendations
  • References

Chapter One


1.0 Introduction

Clearing system is an arrangement where by financial instruments issued by or to bank customers are presented and exchanged so that the net position of member banks will be determined and value given appropriately in line with existing rules of land regarding clearing activities. Under the current dispensation, all licensed commercial banks in Nigeria automatically belong to the clearing house in as much as its position is still favorable at the Central Bank.
There is no doubts that the Nigeria Banking Sector remains the major chapter of the Nigeria Economy.

The other Sectors attract investment more than all the other sector deposit the negative traits exhibited by some of the key players. The growth in this sector can be attributed to the introduction of sophisticated and latest Information Technology (IT) equipment to drive various services and products. The latest being the Automated Clearing System tagged.

The Nigeria Automated Clearing System (NACS) is a relatively New Cheque Clearing System which became fully operational in Nigeria in April, 2004 under the NACS, banks were directed to online clearing. All the banks will act as participating Bank Clearing Centre (PBCC) i.e. their clearing machine would be banked online to NACS Office at NIBSS, the body that administered the Automated Clearing System.

About 25,000 clearing instruments were processed daily with total value of about N6.0billion which approximates to #1.2trillion in year 2000. In order to have a cost effective implementation to Automated Clearing System on the Nigeria Financial System, it is imperative that the solution provides NCR Nigeria Ltd.


1.1 Statement of the Study

Hence in the course of the study, effort has been made to find solution to the following research problems,
The problems are;

  1. Can Nigeria Automated Clearing System improve payment system?
  2. Is it comparable with foreign countries?
  3. What are the likely problems facing the clearing system in the banking industry?
  4. How does Clearing affect the services provided by CBN?
  5. What are the effects of clearing system on the Nigeria economy?
  6. What are the challenges of the Nigeria Automated Clearing System?

1.3 Objectives of the Study

Since banking operation is the nerve centre of the whole Clearing System. The purpose f this research is focus on how to find a suitable and easy way of coordinating on the activities of all other sector within the system so that the services provided by the banking operation (Clearing System) would be made accessible to the client and operating in general will be improved.

Therefore, the research proposed is focus on the critical appraisal of the Clearing System in Nigeria Banking Clearing System (NACS).

The Objectives of the study includes the following;

  1. To discuss the historical background of the case study
  2. To examine the problems associated with the manual based system
  3. To discuss the Nigeria Automated Clearing System (NACS)
  4. To highlights the aims and objectives of the Nigeria Automated Clearing System (NACS)
  5. To examine the participant of the Nigeria Automated Clearing System
  6. To examine the problem and challenges of Nigeria Automated Cheque Clearing System
  7. To maintain and enforce the standard for clearing procedures.
  8. To examine the introduction of Automated Clearing System in Nigeria.
  9. To critically examine the likely problems for Automated Clearing System in Nigeria.

1.4 Research Hypothesis (H0,H1)

  • H0; Efficient Clearing System do not improve banks service delivery.
  • H1: Efficient Clearing System do improve banks service delivery.

1.4 Scope of Study

This research focuses on the effect of clearing service in Nigeria banking industry with special emphasis on Central Bank Nigeria (CBN).

The research is constrained by insufficient finance and lack of time. However, effort was made to ensure that the above constrains and Limitation do not affect the effective completion of the research work. The researcher is making use of both the primary and secondary sources of information gathering.


1.5 Definition of Key Terms

Critical Appraisal

Is the transformation or benefit, it has brought to the clearing system in Nigeria. It can be used to examine the problems associated with the payment system. It is used to find fault with someone.

Clearing

It has been consulted in order to know the liability of its introduction in Nigeria, the problem of the member base on clearing system which consequently to the introduction of the clearing system. It is also a piece of land cleared.

System

Is an arrangement of many parts that work together, it is also a way of organizing something according to certain ideas.

Banking Industry

It is a place where business transactions takes place, it is also a place where people keep their money and valuable items like Gold and certificate, and also a place where money is lent or exchanged and a place where things are stored for use at a later date, a bank can also be define as an organization whose principal operation are concern with the accumulation of temporarily idle money of the general public for the purpose of advantage to others for expenditure. And also people that work in the bank are known as bank official or bank workers. Banker can be defined as a body of persons whether incorporated or not who carry out the business of banking. A banker is also a dealer in capital or more properly a dealer in money.


1.6 Plan of Study

The study is divided into five chapters, the contents are as follows;

  • Chapter one contains the introduction and background of the work.
  • Chapter two contains the review of literature on the research topic.
  • Chapter three contains the research methodology and methods of data gathering and analysis
  • Chapter four contains data presentation interpretation as well.
  • Chapter five focuses on the summary, conclusion and recommendations.

Chapter Five


Summary, Conclusion and Recommendation

5.1 Summary

In the course of conducting this research work, the following findings were made which are;

  1. Inadequate staff training which does not improve technicality and skills required for NACS operation.
  2. The absence of centralized operation of many banks which facilitates correction of their branches.
  3. The epileptic power supply is also a major hindrance to the smooth operations of NACS.
  4. The level of Economic development is also affecting the operations of NACS.
  5. Ineffective Clearing processes and clearing development that will meet up with Nigeria Automated Clearing System standard.

5.2 Conclusion

This study has been able to discuss what Automated Clearing system is, the benefit or transformation has brought to the Clearing System in Nigeria. Furthermore, the study has been able to appraise the Cheque Clearing System as well as looking into the challenges that are inherent in its uses. More so, the view of various outflow concerning cheque has been consulted in order to know the liability of its introduction in Nigeria, problems of the members based on Clearing System which is consequently to the introduction of the Automated Clearing System. The primary data is to get first hand information on the benefit or otherwise derivable in the Automated Cheque Clearing System and finally the analysis of data was presented in order to test the various hypothesis.


5.3 Recommendations

The Nigeria Automated Clearing System is still behind its mate in the developed countries and the Nigeria government needs to release in their effort to improve this sector. During the course of this study, some useful findings were discussed and below are some recommendations based on these findings.

  1. Since Automated Clearing System have great effect on banks profitability which in fact is one of the most important variable in determine banks growth, effort should be made to enhance effective performance of this Clearing house.
  2. The general public should be educated and information about the operations and relevance also Automated Clearing System to the overall Economy
  3. Only qualified and well trained personnel should be charged with the responsibility of managing the Clearing System.
  4. Government should provide sufficient and required infrastructure for the smooth operation of the system.
    Since the operation of the Automated Clearing System requires high capital, all the shareholders in the Economy who are affected by its operations should contribute to the development of the clearing house.

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