Cheque Clearing System in Nigeria Money Deposit Banks
Chapter One
OBJECTIVE OF THE STUDY
The aims and the objective of the study will include:
- To examine how cheques are cleared among banks in the economy
- To evaluate the rules and performance of the cheque-clearing system in Nigeria.
- To highlight the benefit of the cheque system to individual organizations and the government
- To foster a safe, stable, and smooth functioning of the banking system.
Chapter Two
Literature Review
Idris (1997) wrote on banker clearing system and notes and accounting procedures associated with banks clearing house computed figure inet debit and credit balances.
Ogoma (1996) wrote on problem and challenges of developing an efficient payment system in Nigeria where he emphasizes that one of his goals as the Central Bank of Nigeria (CBN) governor is to encourage the reformation and reorganization of clearing system to enhance it operational efficiency and effectiveness,
Lawah and Ojo (2002) defined the clearing system “as the functional process through which proceeds or settlement of cheque and other payment instrument are affected by paying bank (drawee) to the collecting bank (Paying’s bank).
Nnana and Ajayi (2002) states that in Nigeria, Central Bank of Nigeria (CBN) is taking a giant steps to ensure the smooth running of clearing system in accordance with provision of law. It has however, recognized the development of an automated clearing system is an essential and vital element in the development of IT banking sector within the country.
Ajayi (2002) sees the clearing system as an arrangement which enable bank to exchange cheque on one another, it is process in which banks meet one banking day at specific hours to exchange payments instruments, particularly draft and cheque. Clearing on the other hand is the medium through which process of cheque and other payment instrument are transferred from the paying banks to the colleting banks. The designated centre where this is done is known as clearing house and private bankers. In 1675, the bank of England was set up to control such private and merchant banks activities as well as to oversee government accounts
The history of bank started in the nineteenth century when Elder Dumpster Company bought in a foreign owned bank into Lagos.
Standard Bank of Nigeria Limited (Now First Bank Pic): in 1894, a British owned bank open its office in Nigeria and created under the name of Bank of British West Africa. This bank has the credit of being the first banking establishment to practice banking business in Nigeria at a certain juncture in its history, it charged it’s name to the standard Bank of West Africa Limited.
In compliance with the companies act of 1968 this pioneer expatriate bank was incorporate Nigeria Limited It has it’s head office in Lagos. This bank changed it’s name again in 1978 to First Bank of Nigeria Limited in “compliance with the indigenization decree of 1979. Now it is known as First Bank Pic following company and allied matters decree (AMD) of 1990.
Barclays bank limited (now Union Bank Pic) few years after the pioneer bank opened it’s office in Nigeria. The Barclays Bank came to the Nigerian banking scene in 1917. Barclays is an international bank based in Britain like it’s predecessor (the old Standard Bank)on the Nigeria scene, the Barclay’s Bank DCO (Dominion Colonies and Overseas) helped in creating the necessary atmosphere for cultivating banking habits in the country.
Since the companies Act of 1968, the banks was incorporated as the Barclay’s Bank of Nigeria Limited The bank has the reputation of being one of the largest banks in Nigeria with many branches and with it’s head office in Lagos it changed it’s name to Union Bank Limited in 1978 and it is now called Union Bank Pic following the companies and allied matter decree of 1990
HISTORICAL BACKGROUND OF ACCESS BANK PLC
The bank received its license from the Central Bank of Nigeria in 1989 and listed on the Nigeria Stock Exchange in 1998. ‘
Access Bank was taken over by a core of new management head by Aig and Herbert.
Access Bank acquired Marina Bank and capjtajjiank (the former commercial bank credit lylnais Nigeria) by merger. 2007: Access Bank establish a subsidiary in Bank, the Gambia. This bank now has head office and four branches and the bank has pledged to open another four branches.
Starting in 2007, Access Bank began an international expansion drive as of February 2012, it has subsidiaries in Burundi, Cote id’ Ivory, the democratic, republic of Congo, Ghana, Rwanda, Sierra Leone, the Gambia, Tanzania, United Kingdom and Zambia.
Access Bank acquired 88% of the shaves of omni finance bank which was established in 1996 it also acquired 90% of Banquet privee du Congo, which South African investors had established in 2002. access Bank acquitted 75% of the shaves of banker SA in Rwanda Banker had been established in 2001. In September, Access Bank opened a subsidiary in Freetown, Sierra Leone and then in October the bank opened a subsidiary in Lusaka, Zambia and in London, United Kingdom.
CHAPTER THREE
RESTATEMENT OF RESEARCH QUESTION AND HYPOTHESIS
Many runs banks into loss if communication link money, their branches are not efficient. The courier system must be highly functional now that ever before to avoid problems.
Most banks will be lefty out as PBCC (participating bank clearing counter) as they may not be able to meet the mandatory N1 billion deposits, such bank will be mercy of the participating bank clearing centre (PBCC).
Collecting bank would be fully liable if it pays the proceeds of a defective forge instrument before maturity.
Presenting/collecting bank may be the problem to the extent of any act of omission including contributory negligence that causes loss of funds through presentation of defective clearing instrument if it fails to caution the paying bank.
Paying bank may be liable where payment was countermand that is debiting a cheque with is ought not to have been debited.
Paying bank may be liable where cleared for the customer was.not credited to the account paying bank may be liable for conversion that is paying a cheque to a wrong person.
RESEARCH DESIGN AND DATA COLLECTION INSTRUMENT
By virtue of the research topic, the descriptive approach was employed as the major approach use din the study.
The descriptive research consists of a set of gathered data or information summarized and interpreted for the pursuit of a specific study of the purpose descriptive research is concerned with the true investigation of contemporary issues and events, which include the subject of this research work. The expiratory model was used in gaining insight into cheque clearing system.
Data collection instruments could be described as formulated schedule for collecting data from respondents. The questionnaires design for this research work tattles the following format.
A letter explaining the purpose of this research work and soliciting the assistance of the respondents is features on the first page of the questionnaire, the first set of questionnaire were administered to the management and staff of Access Bank Pic. to collection information relating to the level of appreciation commitment and effectiveness of cheque clearing system in Access Bank Pic.
CHARACTERISTIC OF STUDY POPULATION AND SAMPLING
The population of the study is a measure of all item or subject that possess the characteristics or that has knowledge of the phenomenon studied.
A population is finite if all item or subject that constitutes it can be counted if infinite if its size is uncountable. The characteristics of the population is usually includes age, sex, education, etc each research project would require some unifies description.
A sample is a part of a population;’ it may or may not be representation part of the population before a sample is drawn. The research must define what is his unit of analysis or unit of study. The unit is known as a case and in statistic too.
CHAPTER FOUR
SAMPLING TECHNIQUES
Sample techniques are the method for the sample composition together with the procedure followed in selecting the samples from the population.
This study involves investigation of cheque drawing system among banks. As a result of the different bank in Nigeria, a sample as been selected from the population through random method.
The population for the research work is made up of all staff of Access bank pic, llorin kwara State. The junior and senior staff of the bank where selected as our sample six to be specific, fourteen (14) of the staff were selected randomly.
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