Central Bank Of Nigeria To Commence Cheque Truncation In July

THE Central Bank of Nigeria (CBN) has concluded plans to commence its cheque truncation exercise in July, as part of measures to fast-track the implementation of its cash-less policy.

Cheque truncation exercise by the apex bank is expected to reduce the clearing cycle for cheques to two days beginning from July 6.

Cheque truncation is a process that involves stopping the physical movement of the cheque and replacing the physical instrument, with the image of the instrument and the corresponding data contained in magnetic ink character recognition line.

The scheme will provide measure for effective regulation and management of cheques, by reducing the cost and days of clearing instruments, as well as articulate the rights and responsibilities of presenting and paying banks in the cheque truncation system.

Under the scheme, cheque details will be captured by the bank presenting the cheque or its clearing agent, and electronically presented in an agreed format to the clearing house for onward delivery to the paying bank for payment.