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Opinion & Analysis

Clearing cheques gives banks a bad name

A customers at a Chase Bank ATM. file photo | nmg
A customers at a Chase Bank ATM. file photo | nmg 

It comes to something when one has to openly acknowledge that our banks can’t count. But they can’t count. And their difficulty, most severely, seems to lie with the number ‘one’.

Their problem, it seems, is understanding the meaning of the ‘one’ in the one working day that they have, under the Central Bank of Kenya’s rules, to clear our cheques and electronic transfers, and the sometimes very many days they take to do it instead.

They do get one working day. It’s not at all clear why. Clearing is now automated, and even my beat-up old laptop with a crack in its touch screen doesn’t take an extra day to process an electronic instruction.

I tend to think our banks have considerably better computers, even servers, than my little number. So maybe the extra day is for ‘thinking.’

Maybe it’s like Google, where its big thing was encouraging staff to play darts, and sponge ball, and chill in work time so they could be super creative in their next coding breakthrough. Maybe our banks have rest rooms for staff to spend a day getting ready for each burst of mega-power packed cheque and transfer clearing. So they need that extra day.

Somewhat miraculously, almost all of the rest of the world’s banking system doesn’t need the ‘thinking day.’

Indeed, my online bank in the UK, which, admittedly, has won every customer service award the country has to offer for now many years, takes precisely two minutes to electronically deliver fully available funds to another bank account — even on a Sunday — so that’s about the speed of sending an e-mail.

We must find out how they do that.

Nonetheless, the very clear rules for our own banks are that when we deposit a cheque, or an electronic transfer is made to our benefit, the funds must be available to us by the end of that day, plus one day. They call it EOD+1. And that’s working days only: Monday to Friday.

So let’s suppose that our banks in Kenya need that extra one. Maybe their computers are as old as Methuselah, and there’s only one 18-year-old in the creaking, clanking engine room of payment clearing.

And let’s suppose that one can’t include weekends. Maybe, the power gets partially turned off on weekends, and banks can take deposits and cash cheques at the weekend, but can’t transfer money: the electronics stop working.

Our banks are systemically breaking the rules and cheating us.

Maybe that’s harsh, because maybe the central bank never meant the rules to be applied anyway. Because, for sure, many of our banks are not applying them.

The top rank abuse, for the banks that can’t count, is that on top of Saturday and Sunday not being working days, they don’t count Friday as a working day either.

So every deposit made after Wednesday is sat in the bank for ‘other use’ until the following week. Never mind the ‘one’ in ‘one’, they make extra money on those funds - coincidentally, of course.

Indeed, banks make extra money on all those funds mid-transfer, in mid-air, in mid-ether, in the ‘thinking room’. They haven’t disappeared, they are sat somewhere, most often earning extra for the banks.

And that is obviously tempting.

As it is, the funds from a Thursday in-payment should, legally, clear into your account EOD Friday, so you must be able to have them Saturday.

Straight banks, clear Thursday morning in-payments by the end of Friday, because that’s the rule.

Cheating banks clear Thursday morning in-payments on Mondays and later.

Tell me your consumer rights story on webaraza@gmail.com

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