The cheque clearing system goes digital at the end of this week, in a move aimed at increasing efficiency in effecting payments, where transactions are going to be settled within a day, the central bank has said.
The new system, designed to take off on Thursday, called Tanzania Automated Clearing House (TACH) is an electronic clearing system that processes in real time by sending images instead of physical cheques.
The Bank of Tanzania (BoT) Deputy Governor, Mr Juma Reli, said in a release that the new clearing system seeks to enhance safety and efficiency of clearing operations at the same time increases security features on cheques.
“The system has considered adoption of increased security features on the cheque instruments and enhanced standards that allows use of cheque images for clearing hence reducing clearing days”, Mr Reli said.
The system which earlier was expected to be introduced in September 2013, comes as a relief to customers who used to wait for at least five working days to cash their cheques.
The cheque clearance basically was done physically. The Deputy Governor said, “the system will also enhance processing of Electronic Fund Transfer (EFT) by introducing multiple settlement windows within the day.”
However, for the system to work perfectly, banking sector stakeholders should comply with new implemented cheque standards and specification.
Bankers have it that the current clearing method is not only labour intensive but also needs complex logistics and manpower to move the vouchers through the system and manual clearing.
The technology, according to users, has many benefits for banks and customers due to its economic and tactical advantages unlike the manual system which is obsolete and moribund.
The current system, banks solution experts said, involves vast amount of unnecessary labour while cheques are handled for up to eight times and transported for up to four times for each transaction.
The technology involves replacing the physical paper with the electronic image at the bank’s branch where it was first presented.
This will be achieved through the ‘teller capture process’ which requires the front or back office clerk to capture cheque details. The digital image provides for the encryption and transmission of images and data files from the participating banks to the TACH.
The images produced are so clear with no need to transport physical cheques for verification thus eliminating the opportunity for theft and fraud. In Africa the system is already in use in Malawi, Kenya and Botswana.
Source: Daily News, reported from Dar es Salaam, Tanzania
The new system, designed to take off on Thursday, called Tanzania Automated Clearing House (TACH) is an electronic clearing system that processes in real time by sending images instead of physical cheques.
The Bank of Tanzania (BoT) Deputy Governor, Mr Juma Reli, said in a release that the new clearing system seeks to enhance safety and efficiency of clearing operations at the same time increases security features on cheques.
“The system has considered adoption of increased security features on the cheque instruments and enhanced standards that allows use of cheque images for clearing hence reducing clearing days”, Mr Reli said.
The system which earlier was expected to be introduced in September 2013, comes as a relief to customers who used to wait for at least five working days to cash their cheques.
The cheque clearance basically was done physically. The Deputy Governor said, “the system will also enhance processing of Electronic Fund Transfer (EFT) by introducing multiple settlement windows within the day.”
However, for the system to work perfectly, banking sector stakeholders should comply with new implemented cheque standards and specification.
Bankers have it that the current clearing method is not only labour intensive but also needs complex logistics and manpower to move the vouchers through the system and manual clearing.
The technology, according to users, has many benefits for banks and customers due to its economic and tactical advantages unlike the manual system which is obsolete and moribund.
The current system, banks solution experts said, involves vast amount of unnecessary labour while cheques are handled for up to eight times and transported for up to four times for each transaction.
The technology involves replacing the physical paper with the electronic image at the bank’s branch where it was first presented.
This will be achieved through the ‘teller capture process’ which requires the front or back office clerk to capture cheque details. The digital image provides for the encryption and transmission of images and data files from the participating banks to the TACH.
The images produced are so clear with no need to transport physical cheques for verification thus eliminating the opportunity for theft and fraud. In Africa the system is already in use in Malawi, Kenya and Botswana.
Source: Daily News, reported from Dar es Salaam, Tanzania
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