Bankers target June 15 for launch of online cheque clearance

“The official date is June 15th, but we have all been working to achieve a better turnaround,” said Mr Olaka.

Commercial banks are gearing up for a switch to an electronic system of processing cheques that will eliminate the need for physical transportation of cheques to the central clearing house in Nairobi.

Known as the cheque truncation system, the online processing of payments is expected to spur economic activity by speeding up business transactions.

Bank customers are expected to apply for new cheque leaves with standard sizes and 7 by 4 inches and uniform security features that will be easily recognisable by the processing machines.

Equity, Standard Chartered and NIC banks are some of the lenders who are already issuing clients with the standardised cheque books.

21 days

Customers who will not have acquired the new cheque books will have to wait for up to 21 days for the processing of the old generation cheques.

“The window is to incorporate those who had for some reasons not been able to present their cheques” said Mr Olaka.

It also emerged that cheques with alterations will not be acceptable under the new automated system of processing payments.

Bank customers who are used to counter-signing against errors made when drawing cheques will therefore be required to discard any flawed cheques.

“It is away to control fraud which initially occurred by people changing details of the cheque,” said Mr Olaka.

Sh600 million

KBA and the Central Bank of Kenya (CBK) are implementing the electronic system at an estimated cost of Sh600 million as part of reforms in the national payments system.

Implementation of the system also took a step forward with the awarding of a tender on provision of network services to Safaricom on Thursday which will enable online transmission and clearing of cheque images.

High tech imaging equipment will be used to capture details from the cheque using character recognition technology.

The security features and figures on cheques must be set at predetermined positions.

The new system is expected to reduce the number of days taken to clear cheques from remote parts of the country from 10 to two.

Each cheque will have its unique number ingrained in a magnetic strip at the bottom to serve as an identity to ensure it is not re-introduced into the system.

The new cheque leaves will also bear a cheque truncation system KBA water mark as an additional security feature.

Bankers have not yet stated who will bear the cost of replacing the old cheque books.