New cheque truncation policy for deposit money banks

The Central Bank of Nigeria (CBN) is in the process of implementing the cheque truncation system of clearing in the Lagos clearing zone.

Cheque images would now be verified for payment instead of the physical cheque exchange between banks as was done before to ensure a faster and more efficient clearing system aimed at reducing clearing period from the present three (3) days to two (2) working days.

To ensure your clearing instruments comply with this initiative, bank customers are advised to note the following:

• All cheques issued must comply strictly with account mandates and account must be sufficiently funded to accommodate expected debit(s) from clearing.

• All special account mandate requirements such as embossment, seal and signatures or stamps in specific color of ink would no longer be verifiable as cheque images available for payment would be in 'black and white'.

• All cheques requiring confirmation must be communicated to the bank in advance of cheque presentation to facilitate prompt processing.  (Cheque confirmation can also be done 24/7 through the Internet banking platform of banks such as Diamond Bank which offers the self-service Diamond Online to its customers)

• The bank may be constrained to return your cheque if prior confirmation is not received, as the new system operates within restricted timelines and does not accommodate delayed confirmation.

Though it comes with huge challenges for the Deposit Money Banks in terms of new risk, especially in the area of fraud, this new policy by the CBN will improve in banking services in the country.