, NAIROBI, Kenya, Jan 26 – Kenyan banks have now shortened the cheque clearing cycle to two days as the Kenya Bankers Association (KBA) implements the Cheque Truncation System.
The system that took effect on August 15 last year progressively reduced the cheque clearing days from T+4 ( four days after the cheque is deposited).
KBA Chief Executive Officer Habil Olaka said the cycle has now been reduced to T+2 effective January 16 this year, and described the achievement as a key deliverable of the project.
“Customers will be able to get fate of their cheques sooner, giving them access to their cleared funds sooner,” Olaka said.
He revealed that nearly 50,000 cheques were processed on the first day when the new electronic system of clearing cheques went live last August.
The system is the innovation of the Central Bank of Kenya and KBA with the purpose of shortening the cheque clearing cycles to eventually one day and minimising fraud.
In addition the new system is to reduce handling costs, improve payment systems efficiency and provide and streamlined system of processing cheques.
The process also entailed the printing of new design cheque books, for smoother transition into the system.
Failure by bank customers to do so, meant it would take a minimum of 21 days to clear old generation cheques.
Previously cheques from rural regions took up to 10 working days to be cleared by banks while it took those within major urban centres three days.