February 28, 2017

Nigeria Automated Clearing System (NACS)

NACS is used to describe the automated clearing system of the entire banking and financial industry for both electronic instruments (NEFT) and derivatives/images paper-based instruments (cheques). Hitherto, the Nigerian Clearing System was manually operated and paper based, such that instruments took several days to clear and the beneficiary receive value. However, with the automation of the clearing system, this whole process takes less than 48hrs in its entirety.

NACS also made possible the Cheque Truncation System where physical clearing instruments are dematerialized into electronic format at a stage within the bank of first deposit (Presenting Bank) while only the electronic format (images/MICR data) is transmitted electronically to the Clearing House. The original physical instrument is subsequently warehoused by the Presenting bank.