BANKS are beginning to witness some reduction in operating cost following the close to full implementation of the Nigerian Uniform Bank Account Number Standard (NUBAN) scheme.

The cost reduction is derived from efficiency of the automated clearing house system of the banks since the scheme took off this year.

The NUBAN scheme has facilitated better electronic payments among banks, which is cost effective compared to cheque payments.

It has also helped to implement the electronic payment directive of the Federal Government to ministries, departments and agencies (MDAs), thereby reducing operat-ing cost among the banks.

The Federal Govern-ment had directed its MDAs to replace all forms of cheque payments with electronic payments with effect from January 1, 2009.

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.

According to a manager with one of the second generation banks, “The old scheme was hardly efficient and was of concern to the Central Bank of Nigeria (CBN) and other stake-holders, with cost rising in the industry and dragging down the pace of Automated Clearing House (ACH) operations.

“But the introduction of the new number scheme has brought about a reduction in the operat-ing cost of banks.”

Continuing, he said “among the initial challenges to the scheme 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.

“The other issue resolved is abuse of the clearing system included delays in presenting customer’s instructions in the clearing house, delayed application of inward items by some banks, and late return of unapplied inward items.”