By Emele Onu, 08.20.2010 

 

The Central Bank of Nigeria (CBN), has given banks operating in the country a maximum period of nine months to implement the Nigerian Uniform Bank Account Number scheme (NUBAN). 

 

The CBN in a circular posted on its website yesterday and dated July 14, stated that the move was to promote best practice in the account number scheme and also eliminate many of the problems associated with the Automated Clearing House (ACH) as well as the electronic payment system generally.  

 

“The proposed NUBAN is a 10-digit Bank Account Number format, with A Check Digit constructed to support a modulus check, which enables the presenting bank to perform checks. The Check Digit is derived from an algorithm that operates on a combination of the 3-digit CBN-assigned Bank Code and the 9-digit Account Serial Number. The new scheme will promote efficiency of ACH processing and also reduce cost of operations by banks,” the CBN said. 

 

The CBN further stated that the 10-digit NUBAN will make Nigeria fully comply with the 10-digit Account Number structure required by the West Africa Monetary Institute towards the economic integration of ECOWAS countries, adding that the scheme is also the practice in the UK. The banking watchdog gave nine months for full compliance by banks, pointing out that compliance monitoring by the Payments System Policy and Oversight Office will commence six months from the release date of the circular. The CBN also directed banks to submit to its office their comprehensive migration plan. 

 

It said any infractions by any bank to the dictates and the stringent timelines provided in the circular shall attract severe sanctions as may be determined from time to time. “Every bank is required to create and maintain a NUBAN code for every customer account (current, savings, etc) in its customer records database, and the NUBAN code should be the only Account Number to be used at all interfaces with a bank customer. We expect every bank to maintain their present Account Numbers and use them for their internal operations only as from the effective date of NUBAN, but every such account number would have to be mapped to a NUBAN code as an Alternate Account Number.

 

“The bank customer should be provided with only the NUBAN code which he or she would use as a means of account identity at every interaction with the bank. The onus lies on the bank to map such NUBAN code supplied by the customer to the relevant internal account number within the bank’s technology system,” said the CBN.

 

Explaining the imperative for the new number scheme, the monetary authority stated that with the increase in the ACH, there has been increase in complaints of banks and bank customers resulting from abuse of the clearing system. It said the complaints include: bank customers quoting account numbers wrongly; delayed presentment of customers’ instructions in the clearing house; delayed application of inward ACH items by some banks; late return of unapplied inward ACH items and application of inward ACH items to wrong accounts, among others. 

 

“Many of these complaints are traceable to the non-uniform structure of bank account numbers among Nigerian banks. For instance most ACH beneficiaries quote their bank account numbers wrongly while providing such account numbers to their employers, in preparation for electronic means of salary payment. When this happens, both the employer and the presenting bank would not be able to validate such accounts before presenting such payment instructions through the Automated Clearing House.

 

“A uniform account number structure scheme would enable both the employer and the presenting bank to validate account numbers and this would greatly reduce the volume of items returned unapplied due to wrong account numbers; the incidence of posting to wrong account numbers, by the receiving bank; as well as the incidence of delayed presentment of outward ACH items,” CBN said.

 

Source:ThisDay