TANZANIA TO GET NEW CHEQUE SYSTEM IN 2015

BAGAMOYO, Tanzania – The Bank of Tanzania (BoT) said its new electronic system, ‘Cheque Truncation System (CTS), is designed to enable commercial banks to clear cheques within hours and will start next year.

“By next year, all commercial banks operating in the country will be empowered to submit cheque lists at the central bank twice a day and pay their clients within hours,” BoT’s Senior Legal Counsel in the Directorate of National Payment System, George Sije said

The current system allows two days for special clearance but for normal cheques it  takes up to seven days to be cleared.

The development makes business communities to smile as cash transaction to facilitate their business will be easy to implement.

Sije told East African Business Week during a business reporters’ training workshop in Bagamoyo last week, BoT is in the final stages of fixing the system.

He said  the  CTS mechanism allows transactions to be held very safely and the system is very efficient in controlling any kind of money laundering.

“As part of our plan to improve banking operating systems, we are now in the final stage to set up a new electronic scanner system that would allow cheques to be cleared within hours,” he said.

He said if the bank delays to clear cheques within the new time frame, a penalty of Tsh1.5 million ($875.42 ) will be imposed.

This penalty and the new electronic system have been agreed by all commercial banks through their association, called Tanzania Bankers Association, he said.

Cheque clearing rules and regulations established under the Bank of Tanzania Act, 2006 require participants to ensure that the beneficiary’s account is credited after receiving the payment instruction within 24 hours for Dar es Salaam and 7 days for cheques issued upcountry regions.

He said in order to address the challenge, the bank is working on a plan to establish an Ombudsman unit within the central bank that will oversee, promote and protect fundamental rights of bankers and the financial sector in general.

According to him the Ombudsman unit will act as a police post enabling it to receive bankers’ complaints and work out possible solutions.

The introduction of the CTS will add no extra costs to banks and will replace BoT’s Electronic Clearing House (BOTECH) System introduced in 2002.

BOTECH was meant to facilitate inter-bank electronic debit clearing, promote efficiency by enhancing processing speed as well as to minimise errors and acts of fraud in inter-bank transactions. 

Similarly, as part of its commitment to implement a monetary union in the East African Community (EAC) region, the central bank adopted the Tanzania Intra-Bank Settlement System (TISS) which enables it to processes high value and time sensitive payments in real time and gross settlement of payment instructions between banks.

East African Business Week