New cheques to allow same-day clearance


19-July-2012

The Central Bank of Seychelles has said this will be part of the on-going reform and modernisation of the national payment systems and will involve “all members of the Seychelles Clearing House, that is those who clear cheques, including the CBS.

“They will start issuing new standardised cheques to their customers from Wednesday, August 1,” the CBS said in a statement.

It said the new development is in line with the move to the image-based electronic clearing of cheques.

“Customers will benefit greatly by gaining access to funds either on the same day or at the start of the next day as opposed to the current three days delay.

“The new system of electronic cheque clearing will involve the scanning and electronic transmission of each individual cheque’s images from the collecting bank through a new electronic clearing house and subsequently to the paying bank, eliminating the need for the physical transportation and exchange of cheques and thus reducing the time taken for cheque clearing and settlement,” it said, adding the new system will remove the risks of handling the physical cheques manually.

The cheque clearers will be coordinating the migration from non-standardised cheques to nationally standardised and compliant cheques.

 All existing and new customers with cheque book accounts will be issued with new cheque books containing standardised and compliant cheques, and will be requested by their banks or the Seychelles Credit Union, to either return or to dispose of their existing cheques and to start using the new cheques being made available immediately upon receipt.
 
The new cheques will be issued in two standard sizes, the first being the Corporate cheque size and the other, the Personal cheque size, which will feature a Magnetic Ink Character Recognition (MICR) code line that will be printed on special security paper meeting international standards and in line with international best practice.

“All new cheques issued by the clearers will comply with the standards and specifications as per the Seychelles’ Cheque Standards.

“Corporate customers wishing to produce their own corporate branded cheques will be required to refer their proposed designs to their respective bank or the Seychelles Credit Union for approval and testing of the design and code line to ensure that they meet all requirements before gaining final approval to issue the cheques,” the statement said.

With the introduction of the new standardised and compliant cheques, electronic capture terminals comprising cheque scanners will automate the cheque collection and deposit process, making use of the scanned image and the MICR code line to capture the cheque details efficiently and accurately.

This will be to the benefit of customers as the manual process of capturing such information will be eliminated thereby accelerating the cheque clearing and settlement process at both the presenting and the paying bank.

  All previously issued and non-standardised cheques shall be completely phased out during a period of three to five months by all of the cheque clearers to ensure customers get the most benefit of the electronic system.
 
“In addition to the improvements in availability of funds, the improved cheque clearing process will also contribute to reducing the incidences of fraud.  The introduction of security features embedded within the paper and the use of the MICR code line will assist in the identification of any non-compliant and therefore potentially fraudulent cheques.

“Further advantages of the new electronic cheque clearing and settlement system will be the reduction in the clearing and settlement cycle, to facilitate the more expedient identification of cheques that will be ‘returned’ due to ‘insufficient funds’ and the customers will be informed quicker thereby allowing alternate means of payment to be made.

 All cheque clearers will conduct awareness programmes regularly to educate the general public on the correct use of these newly standardised and compliant cheques and on the changes in the cheque clearing process,” said the CBS.

With the introduction of the new standardised and compliant cheques, the cost of a new cheque book will be higher than the existing prices due to the improved security features such as the use of security paper and the introduction of the MICR code line on the new cheques.

The CBS said it is, however, confident that the project will not only improve efficiency in the cheque clearing process but will lead to increased customer satisfaction and place Seychelles at a position consistent with other regional and global economies, “and the country will thus be in line with international best practices and standards”.

 

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