Following the commencement of cheque truncation policy in Lagos banks, customers have endorsed the policy.

They said it was a laudable initiative by the Central Bank of Nigeria.

Some banks’ customers, who spoke with our correspondent on Monday at various banks, said the development would reduce delay in getting value for cheques.

Cheque truncation system involves the conversion of physical cheque into electronic form for transmission to the paying bank, thereby eliminating the cumbersome physical presentation of the cheque. It is also aimed at saving time and processing costs.

A customer in one of the banks, Mr. Adefemi Adekunle, told said that initiative would facilitate an effective and efficient payments system at the bank.

A bank attendant said it would improve the efficiency of cheque clearing and ensure faster settlement of cheques by eliminating the tedious process of exchanging physical cheques among clearing banks.

The CBN said last week that the cheque truncation policy would commence last Friday with the Lagos Clearing House serving as the pilot zone.

The CBN said conditions were appropriate for the cheque truncation scheme to commence in Lagos.

It said, in a statement obtained by our correspondent, “As part of our preparation for the introduction of the cheque truncation system, the CBN carried out a systems audit certification test on all banks 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 commence in 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.”

Under cheque truncation, the clearing cycle will reduce by one day.

It means, if a customer deposits a cheque early on Monday, value will be obtained on Wednesday as against Thursday under the current clearing cycle.

The CBN had earlier announced that it would commence the cheque truncation scheme in August. It said, “To ensure that this new process is efficient and seamless, account holders would have to ensure that their account are sufficiently funded before cheques are presented, as all cheques presented to an unfunded account will be returned unpaid.”

It added that account holders would be required to pre-confirm all cheques before presenting so that they would not be returned unpaid.

It stated, “Special mandates on the issuance account such as the use of seals, embossment, thumb-print or colours of pen, other than black pens stated as part of a mandate would no longer be valid as only images will now be used during the clearing session. Hence, it is necessary that customers with such special mandates update their mandates.”

Source: Punch/Ademola Alawiye