Kampala — Bank of Uganda (BoU) has said it will begin operation of a new Automated Clearing System on April 20th 2018. The new system will provide a fully Automated Clearing House with a cheque truncation capability.
Cheque truncation involves exchanging electronic cheque images in the clearing process instead of exchanging actual physical cheques.
Under the new Automated Clearing System, cheques presented for payment will be scanned by the collecting banks and the resulting high definition images, together with relevant electronic data, will be transmitted electronically to the paying banks through the Clearing House.
This will eliminate the physical movement of cheques between banks and across bank branches, thus speed up the process of cheque clearance, settlement among banks and realization of funds by the beneficiaries.
The bank said in a statement that a fully Automated Clearing House will offer huge benefits to the Financial Sector and to the general public in a number of ways including: A reduction in the time required to clear a cheque to two days and eventually to a single day. The beneficiaries of cheques will, therefore receive their funds more rapidly; A reduction in the costs of cheque clearing; A reduction in risks involved in cheque clearing. Electronic clearing is less vulnerable to fraud than manual cheque clearing and that the entire country will have access to a single centralised cheque clearing platform as opposed to the current decentralised and unaligned platforms.