Idris Ahmed
5 November 2009
Abuja — Some banks in Nigeria have been bouncing their drafts, thus, creating lack of confidence in the payment system, the Central Bank of Nigeria (CBN) said yesterday.
CBN Deputy Governor Tunde Lemo who represented Governor Sansui Lamido Sanusi at the National Payment System conference in Abuja said "if banks don't have confidence in their payment system" they cannot convince others to do.
He said: "We have received compliant about banks bouncing their own draft. This will create lack of confidence in the system. We must have confidence in ourselves."
Analysts link the situation to issue of liquidity problem in the banking sector.
The Governor said that efficient payment system was necessary because it is the channel through which financial resources flow from one segment of the economy to the other.
According to him, the use of various instruments in the payments system obviates the bottleneck of trade by barter such as double coincidence of wants, "while the introduction of new instruments enhances the speed of transactions, thereby reducing the cost to users."
He said an efficient payment system ensures smooth and effective transfer of financial resources from surplus to deficit units of the economy, thus, promoting optimal utilization of resources.
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