Central Bank of Kenya (CBK) Governor Professor Njuguna Ndung’u said banks have invested in the systems that will allow customers from all corners of the country to have their cheques cleared in two days.
Since the introduction of the Cheque Truncation process in 2011 the clearance cycle has gradually reduced from four to two days.
Cheque Truncation is the process of clearing cheques between banks using the image of the cheque and associated electronic information, a process that take places at the automated clearing house owned by the Kenya Bankers Association (KBA) and regulated by CBK.
“The final deliverable initiative of the cheque truncation project is to reduce the clearing period to one clearing day or T+1. Today I am happy to announce that by further reducing the clearing period, banking customers will benefit by accessing their funds at much shorter time to conduct economic activities,” Ndung’u said.
He noted that the new system had increased the use of cheques pointing out that in June 2013, the automated clearing house processed 1.5 million cheques valued at Sh175 billion.
The continued systematic modernisation of the payments and settlement systems is aimed at enabling the country’s payment system to attain international standards and ensure that Kenya becomes a financial hub in the region as well as the preferred investment destination.
KBA chairman Jeremy Awori said the new developments will be at no extra costs, calling on the banks to be well prepared to ensure smooth implementation come August 19.
He maintained that the banks will be keen on ensuring zero fraudulent cases through use of fake cheques.
“With the new T+1 cycle, a business person in Garissa can deposit a customer’s cheque on Monday and get money in their account on Wednesday regardless of where their customer bank is and at no extra cost,” Awori said.
In the 1950s, it took longer than a month to have a cheque cleared, improved to 21 days in the 90s and 10 days in 2002. It later reduced 4 days in 2008.