Effect Of Automated Clearing System On Bank Performance In Banking

Project and Seminar Topics with material for Banking and Finance

Effect Of Automated Clearing System On Bank Performance In Banking


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


1.0 Introduction

General Description of the Study

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.


1.1 Purpose Of The Study

This project particularly is the following purpose irrespective of the actual study undertaken.

  1. To produce the number of clearing banks
  2. To make process more manageable faster efficient.
  3. To cut the number of clearing day to boiter, so that consumer will have the confidence and encourage of the uses of non-instrument.
  4. It’s designed to eliminate these identities difficulties and encourage development and integration of other electronic payment and settlement product.
  5. To achieve effective control, through tracking reconciling physical item or activities database alone enquires e.t.c.
  6. It enable the exchange of data and information between financial institution that whether to had no direct ink to one another clearing system have patience security feature that can minimize it has help to stabilize banking system and align cheque processing in Nigeria with the international standard.

1.2 Statement of the Problem

The problem of this study is to fund out empirical analysis basically on applied research aim of solving an immediate practical problem such as research question like:

  1. Nigeria automated clearing system protects can improve payment system.
  2. Is it comparable with foreign country?
  3. Does it have effect on value of money and time lag.
  4. How many banks will be a participant, these statements of the problem of this particular project?

1.3 Hypothesis of the Study

The following hypotheses were formulated and tested by the study

H01: there is no significant relationship between Automated clearing system and bank performance in Nigeria

H02: there is no significant relationship between Automated clearing system and electronic payment system

H03: there is no significant relationship between Automated clearing system and safety of electronic payment


1.4 Significance of the Study

This study has important value to the academic it helps the student of Banking and Finance, Business Administration, Marketing, and Economics in our various institutions to have knowledge about the automated clearing system as part of their course or study when they get to the field so that it would not be strangled to them.

Community:

It helps people in community especially those who enjoy banking services by providing quick and faster service for them for instance when a cross cheque is drawn to any bank, the customer of collecting bank enjoy quick and faster payment.

Society­:

The introduction of (ACS) growth and economy development in which society are the beneficiary.


1.5 Delimitation of the Study

The study is limited to some banks such as Community. e.t.c. the study “Universal Trust Bank Plc” is one of the participant which focus on

INTRODUCTION PROGRAMME FROM NEW EXECUTIVE ASSISTANT

Universal Trust Bank Plc

Clearing within flexible environment to suitable suggestion


1.6 Limitation Of The Study

To carry out this project is not an easy task due to circumstances that warrant it such as;

Time Factor:

Time factor is the major factor that hinder the investigation to be carried out is due to the academic situation because daily academic period involved information to complete the project.

Capital constraint

Capital constraint which make it difficult to buy the material and collection of appropriate data for the project.


Chapter Five


Summary, Conclusions and Recommendations

5.1 Introduction

This chapter summarizes the findings on the effect of automated clearing system on bank performance in banking, Universal Trust Bank Plc as case study. The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

In this study, our focus was on the effect of automated clearing system on bank performance in banking, Universal Trust Bank Plc as case study. The study is was specifically focused on examining the importance and how It’s designed to eliminate these identities difficulties and encourage development and integration of other electronic payment and settlement product.

To achieve effective control, through tracking reconciling physical item or activities database alone enquires e.t.c. It enable the exchange of data and information between financial institution that whether to had no direct ink to one another clearing system have patience security feature that can minimize it has help to stabilize banking system and align cheque processing in Nigeria with the international standard.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 100 responses were validated from the enrolled participants where all respondent are staff of Universal Trust Bank Plc.


5.3 Conclusions

This study has been able to study the impact of central clearing and settlement system on the performance of the Nigerian financial payment system. It will be recalled that the policy makers/ monetary authorities have been at the forefront of implementing policies to promote the advancement of the payment and settlement system. At the hallmark of such policies is the introduction of the Nigerian automated clearing system, expected to reduce the number of days taken for instruments to be cleared and payments made. The need to therefore, investigate whether such introduction has actually improved payment delivery, formed our central problem in this study. Sequel to this, the following result were found.;

  1. There is significant relationship between Automated clearing system and bank performance in Nigeria
  2. There is significant relationship between Automated clearing system and electronic payment system
  3. There is significant relationship between Automated clearing system and safety of electronic payment

5.4 Recommendation

Based on the findings the researcher recommends that;

  1. This study recommends that online receipting services mechanism should be adopted throughout the entire organization to allow effective payment process.
  2. The bank should offer a secure option that is highly protected from fraud for customers to make payments electronically. .
  3. This study recommends that the bank should integrate payments into the booking engine to allow an effective payment process for customers to take place. This study recommends that the bank should offer multiple payment options to customers including: – PayPal, Skrill, iPay, PesaPal, Jambo Pay, among others. .
  4. The use of automated clearing system should aim at further reduction of the current T-three to T-zero. With this in place, cheques once presented can be settled immediately to enhance the general performance in the system.

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