The Kenya Bankers Association (KBA) has partnered with the Central Bank of Kenya to waive commissions on all upcountry cheques to reduce the burden on the customer.
KBA, which is an umbrella of all 43 banks in Kenya, has announced that from July 1, 2012 all upcountry cheques presented to the Automated Clearing House will not attract any clearing commission charges and will therefore be treated as local clearing.
The milestone follows the successful implementation and bedding of the reduced clearing Cycle of T+2 (two working days) countrywide.
“This is a significant relief for bank customers who live and transact upcountry and in remote areas…It effectively makes the country ‘one clearing zone, and passes the benefit of reduced cost of clearing as promised at the inception of the project’,” said KBA Chief Executive Officer, Mr. Habil Olaka.
“Now the upcountry commission on cheques presented through the clearing house should cease, in line with the KBA guideline, which therefore means that all member banks have made the necessary amendments to their systems in preparation for this change that takes effect on 1st July,” he said.
The Cheque Truncation system has been recognised by the Ministry of Public Service as one of the most innovative transformations in Kenya’s banking industry, having changed the process from one driven by the physical (manual) exchange of cheques to the electronic capture and transmission of data between the banks.
“We are proud of the technological innovation we have been able to realize in conjunction with the Central Bank. Together we continue to work to improve the flow of monetary transactions, thereby contributing to economic development,” added Mr. Olaka.
The Cheque Truncation project has delivered on a number of key goals as envisioned in its business case. The introduction of new system has seen a reduction of the cheque clearing cycle from 10 days for upcountry and remote branches to two days.
