NAIROBI, Kenya, Aug 16 – Bank customers who continue issuing or receiving old generation cheques will now see them being cleared in a longer period of 21 days.
This follows the implementation of the cheque truncation system, which took effect on Monday.
Kenya Bankers Association Chief Executive Officer Habil Olaka told Capital Business that a longer clearing cycle for the old generation cheques would serve as a deterrent and ensure bank customers acquire the new cheque books.
“We have entered into a new system of clearing cheques in Kenya, and this is just a measure to ensure compliance and uniformity for all bank users,” Mr Olaka said.
Mr Olaka also revealed that KBA was in discussion with all commercial banks to come up with a fee that will be levied on all persons who have the old generation cheques deposited in their accounts.
“The pain of having non-compliant cheques will be felt by the beneficiary and this we hope will make people go for their new cheques,” he said.
Although no figure has been arrived at, there have been suggestions of levying a Sh500 fee to service transactions with the old cheques.
The new truncation system was introduced by the Central Bank together with KBA to replace physical exchange of cheques between banks with the electronic process, thereby reducing the transaction period.
With the truncation system in place, cheques from across the country will be on a T+3 clearing zone (day of issue plus three days), as opposed to the previous system where they would take longer.
The new cheques have standard security features, with the only distinction being identification marks or logos of respective banks. The move to entrench cheque truncation is aimed at minimising the risk of cheque substitution and improving the speed of cheque-based payments.
The CBK and KBA expect the new system will reduce handling costs, improve payment systems efficiency, and provide an efficient and streamlined system of processing cheques.