NAIROBI, Kenya, Aug 17 – Nearly 50,000 cheques were processed on Monday when the new electronic system of clearing cheques went live, in what bankers say points to positive uptake of the new system.
Kenya Bankers Association Executive Director Habil Olaka said the Cheque Truncation System (CTS) took off without a hitch, which he attributed to a high compliance level by bank customers.
“In terms of the volumes, we processed 49,612 cheques on the new CTS against 69,674 processed in the existing clearing house. This is approximately 71 percent of the volume expected,” Mr Olaka said.
“On the credit side, we processed 16,948 items on CTS against 21,458 items on the existing system which is about 79 percent.”
The new systems entailed the printing of new design cheque books, 95 percent of which have been completed and are available for use.
“The clearing position and values generated by the old system and the New Cheque Truncation system match, which reflect a high compliance level with the standards from banks,” he added.
Some banks however experienced some teething problems with the communications link where it took some time to finalise transmission to the Automated Clearing House.
Mr Olaka however assured that these challenges were being addressed and he expected them to be ironed out soon.
The system is the brainchild of the Central Bank of Kenya and KBA, with the aim of boosting efficiency through shortening the cheque clearing cycles from the current average of four days to two days by January next year.
Eventually, the parties hope this will come down to just one day in 2013.
In addition, the new cheques have enhanced security features, which essentially reduces the chances of fraud.
Banks also stand to benefit from the improved efficiencies as they will phase out the cumbersome practice of physically transporting cheques from bank branches to the clearing house using courier services.
The association however continues to appeal to all customers who are yet to apply for their new cheque books to do so to ensure a faster transition to the new system.
Some punitive measures such as a fee of Sh500 to clear the old cheques will be imposed on the non-compliant customers.
It will also take a minimum of 21 days to clear such cheques which means that customers will not have the luxury of accessing their money faster.
With this initiative already underway, the CBK is convinced that it is making good progress in deepening financial inclusion among Kenyans.
The establishment of regional currency centres that enhances access to cash by banks and the credit information sharing project for boosting customer access to credit have been cited as other measures towards this end.
The CBK is this Friday due to open the Meru Currency Centre which will become the fourth in the country as part of its move to ease the movement of Cash in Transit.
At the event to the presided over by the Deputy Prime Minister and Minister for Finance Uhuru Kenyatta, the CBK will also the launch the ‘Currency Centres’ concept in Kenya which besides minimising the theft of cash in transit will also lowers the cost of doing business.