The Nigeria Interbank Payment & Settling Systems (NIBSS) has launched a technology in partnership with Precise Financial Systems to enable Deposit Money Banks (DMBs) clear customer cheques within hours rather than the normal two days it takes. This Technology has been in a Beta testing phase for 11weeks by Pilot Banks with a total of 10million transactions worth a whooping 5trillion naira processed.
Mr. Ade Shonubi the Managing Director of the NIBSS at a meeting in Lagos to discuss the process says that the collaboration has being in the works for 18months, saying the technology will enable financial institutions to achieve payment and non-payment transactions. Comparing the status quo of currently only four (4) clearing sessions that exists, he says the advantage of having multiple clearing sessions is that the net amount against each bank is smaller and risks can be better managed, “With the new system, a cheque can be cleared within six hours, four hour or at whatever duration we agree”
The Managing Director of Precise Financial System, the Company behind the NACS software, Dr. Yemi Okeremi explained that the process of clearing cheques has been simplified across all Nigerian Banks with the introduction of this application and that successful deployment of the application across DMBs will open the door for other technology companies to tackle other problems Nigeria faces through Financial Technology.
Dr. Yemi Okeremi in commending the smooth working relationship between PFS & NIBSS said “The new system allows bank customers to achieve the benefits of shorter cheque clearing cycles, as it reduces the operational cost of the banks because the clearing department of the banks can work smarter and close earlier.
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”
Mr. Kolawole Aminu, Head of Domestic Payments & Collections at Union Bank said “over N5 trillion that has been processed on the new platform just within 11 weeks. We are talking of over 10 million in terms of the volume of cheques. That tells you how much we do with this mode of payment.”
Dr. Okeremi in explaining the benefits of this to National Security said “As MD of NIBSS have explained, what we have given the country is an infrastructure. It is a switch. It can switch anything. I look forward to when that infrastructure can be used for other transactions. When a country talks about independent, sovereignty, these are some of the things that matter. How much of your services are internal to you? Are you breathing through the nose of other countries and you claim you are independent? These are some of the things that make one happy and we can say that Nigeria’s problems are being gradually solved. There is a big road ahead. do what we could have done for ourselves, we export prosperity and import poverty.
If you go to any developed country, they would not allow foreigners to have access to certain critical infrastructure in their country. So why do we keep exposing our country to such sovereign risks. I think the fact that NIBSS has led the way in this direction, I expect other organizations to follow suit. The new solution is conceived and developed by Nigerians thereby saving some capital flight for the country”.