Cheque clearance to take one day

By James Anyanzwa

Commercial banks will reduce the cheque-clearing period from two days to one from August 19.

This means if you deposit a cheque in any part of the country on Monday, your account will be credited with cash by Wednesday.

“By further reducing the clearing period, bank customers will benefit by accessing their funds after a much shorter time to conduct economic activities,” said Central Bank Governor Njuguna Ndung’u yesterday. He was speaking at a media briefing during the launch of the new cheque clearing cycle at CBK offices in Nairobi.

He said the continued modernisation of the payments and settlement system is aimed at enabling the national clearing house attain international standards and ensure that Kenya becomes a financial hub in the region and the preferred investment destination.

According to data from CBK, the reduction in the cheque clearing cycle from three days (T+3) to two (T+2) in January last year saw an upsurge in the volume of cheques being processed.

For instance, the automated clearing house processed 1.5 million cheques valued at Sh175.1 billion in June.

Ndung’u said the switch to electronically designed cheques — cheque truncation — in August 2011, has improved the efficiency of the clearing house. Initially, upcountry cheques would take up to 10 days to clear.

“As an industry, we have come quite a long way and we are now excited that we have cut the cheque clearing cycle by one extra day without any increase in costs to our customers,” said Kenya Bankers Association Chairman Jeremy Awori. 

Cheque truncation is the brainchild of a collaboration between commercial banks and CBK  and forms part of reforms being implemented in the national payment system.

It speeds up collection of cheques, reduces the scope for fraud and eliminates logistics and reconciliation problems.