Central Bank of Nigeria Lifts Suspension of Cheque Clearing
- Nigeria’s Central Bank has lifted the temporary suspension imposed on the country’s cheque clearing with effect from today, Tuesday, April 28, 2020.
- According to the bank, the directive was intended to “ensure hitch-free clearing and settlement activities” during the previous 14-day lockdown.
The Central Bank of Nigeria has lifted the temporary suspension imposed on the country’s cheque clearing with effect from today, Tuesday, April 28, 2020. This was revealed in a circular from the apex bank.
In the circular signed by the Director, Banking Services Department, Sam Okojere, the apex bank clarified that it has lifted the suspension in furthering its effort to establish a secure and efficient payment system in the country.
Partnering with key stakeholders, it added that “there was a need for cheque clearing to accommodate users of cheque as one of the payment instruments in Nigeria, despite the lockdown of some states and the Federal Capital Territory (FCT).”
It read, “In view of the development, the bank hereby lift the temporary suspension of cheque clearing in Nigeria. Consequently, cheque instruments will be allowed to pass through the clearing system, with effect April 28, 2020.”
According to the bank, the directive was intended to “ensure hitch-free clearing and settlement activities” during the previous 14-day lockdown.
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Many corporate organizations may have pressured the CBN to lift its suspension, as most corporations still rely on check payments for most of their bills. Corporations also issue checks to pay suppliers, utility bills, services and other important expenses, much of which, had the suspension continued, may have resulted in major defaults.
Also, the suspension of the CBN was based on the two-week lockdown envisaged earlier that has now stretched to around 5 weeks. Therefore, the effect of not facilitating payments was hard on corporate Nigeria, threatening an economy already short of cash.
Given a decline in the adoption of cheques as a chosen form of payment for most companies, it still accounts for an annual transaction value of N373 billion, or N4.4 trillion. The average monthly volume of cheque transactions in 2019 was about 651 thousand.
With this new directive, banks will begin clearing cheques via the approved clearinghouses. It is also expected that bank workers involved in check clearing to be allowed back to work. Corporate signatories currently working from home will also need to allow workers to sign checks at their homes or preferred locations.
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