As part of efforts aimed at revamping the National Payments System, the
Central Bank of Nigeria (CBN), in August, 2007, launched the Payments
System Vision2020 (PSV2020) initiative. This process commenced with the
unveiling of the PSV2020 Strategy document, which benchmarks the
Nigerian Payments System against global best practice. The CBN
conducted a gap analysis using the Bank for International Settlements
(BIS) Core Principles, and thus gained an overview of the Nigerian
Payments System. This was used to determine areas of improvement in
our desire to install a
“Nationally Utilized and Internationally
recognized”
Payments System in Nigeria.
Following the survey, the Bank created 11 working groups with members
drawn from the CBN, Deposit Money Banks (DMBs), and other
stakeholders in the payments ecosystem. Bearing in mind the objectives of
the PSV2020 mandates, the eleven working groups were further
categorized into three groups, namely,
Infrastructure, Initiative, and
Special Interest,
working groups.
One of the working groups under Infrastructure, is Cheque & Automated
Clearing House (Cheque & ACH), charged with the following mandates:
To draft the Policy for the maximum limit on cheques;
To update the Nigerian Bankers Clearing House Rules;
To facilitate the introduction of cheque truncation/express clearing in
Nigeria’s Automated Clearing House infrastructure;
To monitor, and make recommendations to the Bank on the ACH
infrastructure, in line with global best practice.
We are happy to inform all stakeholders that, in addition to the review of
the Nigerian Bankers Clearing House Rules (NBCHR), the Nigerian
Uniform Bank Account Number (NUBAN) scheme, has also gone live.
To further improve the efficiency and timeliness of cheque clearing in
Nigeria, the CBN recently approved the Guidelines on Cheque Truncation
in Nigeria. The objectives of the Cheque Truncation Guidelines are to:
(i) provide for the regulation and management of cheque
truncation in Nigeria with a view to reducing cost and days of
clearing instruments;
(ii) articulate the rights and responsibilities of presenting and
paying banks in the Cheque Truncation System;
(iii) provide for minimum technical and operational standards for
cheque truncation; and
(iv) To facilitate the implementation of an effective and efficient
payments system in the Nigerian Banking Industry.
As part of our preparation for the introduction of the Cheque truncation
system, the CBN carried out a Systems Audit Certification/Test on all
Deposit Money Bank, to confirm their readiness for the commencement of
the scheme in Nigeria. Our finding is that conditions are appropriate for the
cheque truncation scheme to go-live in the Lagos area. The implementation
of the initiative will reduce the Cheque clearing cycle from T+2 to T+1, and
thus make it more attractive to users, as an alternative means of payments,
instead of transacting in cash. The approved Guideline for cheque
truncation was subsequently presented to key stakeholders on April 27,
2012.
In consideration of the above report, and other indices, the CBN is pleased
to inform all the banks and the general public that the commencement date
for cheque truncation in Nigeria shall be August 10, 2012. The Lagos
Clearing Area will serve as the pilot zone. We propose that as soon as
possible, the scheme will be extended to the other clearing zones across
the country.
It must however be borne in mind that as we commence the
implementation of cheque truncation scheme in Nigeria, the CBN is not
unmindful of the inherent risks associated with the process. To this end,
and in furtherance of the electronic payments initiatives, the Guideline has
clearly defined the roles, infractions, and sanctions for all the participants in
the scheme. Compliance shall be strictly monitored and defaulters duly
sanctioned.
Furthermore, all stakeholders are implored to make the necessary
arrangements, to ensure the successful implementation of the scheme. It is
important to state that following the implementation of this scheme, all
customers’ mandates, and other instructions requiring the sighting of
physical cheques before making payments decisions, will no longer apply
as the instruments are expected to be pre-confirmed by the issuers of such
instruments.
As the initial cost of cheque truncation to banks is likely to be significant,
the CBN would encourage multi-bank shared cheque processing
centers/facilities. This is likely to reduce the cost of the new scheme.
We request all stakeholders to be guided accordingly.
Signed
Ugochukwu A. Okoroafor
Director, Corporate Communications
Central Bank of Nigeria