Customers who bank cheques into their own accounts from other banks will now have their cheques cleared within a day. This will be a reduction from the current processing timelines of up to three days.
In the same vein, electronic fund transfers or EFTs will clear within the banks’ hours of operations down from the previous processing timeline of 24 hours. Foreign currency-dominated cheques will clear within two days from the previous duration of seven days.
“Currently, local currency cheques clear on a T+1 cycle with value available to the payee one day after the cheque is presented by the paying bank to the ACH,” the Kenya Bankers Association (KBA) said.
The new cheque processing duration follows the successful upgrading of the Automated Clearing House System (ACH). This is the platform that is used by banks for electronic funds transfers and cheques.
“The new system will significantly improve clearing services for cheques, direct debits and EFTs in the country. The new standard will also provide enhanced payment insights, supporting banks’ risk management initiatives and informing policy decisions towards promoting a responsive financial sector,” said Habil Olaka who is the chief executive officer at KBA.
Ernest Mburu: From plumber to owning 40 chain stores countrywide
According to the Central Bank of Kenya, the new money transfer processing timelines are will boost anti-money laundering and countering financial terrorism (AML/CFT) screening and fraud monitoring.
“The CBK reiterates its commitment to facilitating the emergence of a safe, secure, innovative payments ecosystem,” the CBK said.
