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Cashless: CBN Cheque Truncation System Goes Live In Lagos, Abuja

As part of ongoing efforts by the Central Bank of Nigeria (CBN) to shorten the settlement cycle of a cheque to one day, the apex bank has worked with Nigeria Inter-Bank Settlement Systems (NIBSS) and financial services software provider, Precise Financial Systems (PFS) to implement live cheque truncation system in Lagos and Abuja.

PFS and NIBSS have enabled the CBN to execute the project, as the cheque truncation platform, now live in Lagos and Abuja, will see other branches of the CBN concluding it by the end of March. The cheque truncation system would allow all branches of the CBN to capture all cheques in the respective branches and maintain them in a central server in Lagos, it then allows all captured cheques from the bank to be transmitted to the clearing house from Lagos.

According to the Managing Director/CEO of PFS, Mr Yele Okeremi, the system is responsible for the processing of all inward cheques and Nigeria Electronic Financial Transaction (NEFT) of banks. While it would address all required management reporting, its controls are guided "as the system implements all required maker checker rules of the banks," he said.

With the activation of cheque truncation regime through iTeller platform in Nigeria, one important challenge the system has addressed is the ability of the CBN to meet the deadline for cheque truncation nationwide.  Aside this, the platform has also assisted the CBN to reduce cost, time and the stress involved in its cheque clearing operations, as the system removes all "logistics costs associated with clearing."

While further enumerating the benefits of the cheque truncation system, he said that before the new regime, Nigerian banks would have to send their outward cheques to respective central clearing departments by dispatch riders or bullion vans. But with this, there would not be any need for that again as cheques can be truncated directly at the branch of deposit.

"This removes time-wasting collation and photocopying exercises usually carried out at the bank branches. It also removes the need to post-encode cheques, and this provides the platform to use more agile cheque scanners for image and magnetic ink character recognition (MICR) capture."

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Original Page: http://www.leadership.ng/nga/articles/50895/2013/03/26/cashless_cbn_cheque_truncation_system_goes_live_lagos_abuja.html