NUBAN'LL ENHANCE GOOD CORPORATE GOVERNANCE IN BANKS â€“ ASSBIFI BOSS
The President, Association of Senior Staff of Banks, Insurance and other Financial Institutions, Mr. Sunday Salako, has said that the introduction of the Nigerian Uniform Bank Account Number for banks in the country by the Central Bank of Nigeria will facilitate good corporate governance.
He said, although the development could pose challenges for banks in Nigeria, in the short, medium and long run, the dividends would be seen as a lot of control measures would have been put in place by the structure.
According to him, the task ahead will create few cost centres for the banks in form of investment on more stringent control measures. Salako, who spoke to our correspondent on Wednesday, explained that the impact of such move on the health of the banking sector would continue to be felt for a very long time on the economy.
This development, according to some experts in the financial sector, was in line with the CBN's strategy to use monetary policy to hasten economic growth.
The apex bank had earlier said that the latest development was as a result of several complaints that characterised the old practice, which had continued to affect clearing system in the banking sector.
The CBN said, with this in place, every bank was required to create and maintain a NUBAN code for every customer account (current, savings, among others) in its customer records database, while the NUBAN code should be the only account number to be used at all interfaces with a bank customer.
It had given banks operating in the country a maximum period of nine months to implement the uniform account number.
The CBN, in a circular posted on its website recently, maintained 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 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 the cost of operations by banks,' the CBN said.
It also explained that the 10-digit NUBAN would 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 United Kingdom.
The apex bank also said any infractions by any bank to the directive provided in the circular would attract severe sanctions .
It maintained, 'Every bank is required to create and maintain a NUBAN code for every customer account (current, savings, among others) 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.'