By Sylivester Domasa
Starting early next year, commercial banks will be empowered to submit cheque lists at the Bank of Tanzania twice a day, allowing them to pay clients within hours.
The announcement was made by Senior Legal Counsel in the Directorate of National Payment System, George Ben Sije while addressing newsmen at a three-day training seminar on functions of the central bank in Bagamoyo on Wednesday.
Sije explained that to achieve the task, BoT is finalising an electronic system dubbed, the Cheque Truncation System (CTS) that will safely and efficiently speed up clearance of cheques.
“As part of our programme to improve banking operating systems, we are working to set up a new electronic scanner systems to allow cheque clearance within hours instead of the current two to seven days…the system should be ready by early next year,” he announced.
He also explained that, as is already the case now for delayed clearance of cheques, failure to clear cheques within the new time frame, a penalty of 1.5m/- will be imposed since on the part of the responsible banks, it constitutes ‘undue enrichment’(profiting at the expense of another) a legal offence.
“Cheque clearing rules and regulations established under the Bank of Tanzania Act, 2006 require participants to ensure that the beneficiary’s account is credited after receiving the payment instruction within 24 hours for Dar es Salaam and 7days for cheques issued upcountry regions,” he said.
He said in order to address the challenge, the bank is working on a plan to establish an Ombudsman unit within the central bank that will oversee, promote and protect fundamental rights of bankers and the financial sector in general.
“This will act as a police post enabling it to receive bankers’ complaints and work out possible solutions,” detailed the Senior Legal Counsel.
He said introduction of the CTS will add no extra costs to bankers and will replace BoT’s Electronic Clearing House (BOTECH) System introduced in 2002.
BOTECH was meant to facilitate inter-bank electronic debit clearing, promote efficiency by enhancing processing speed as well as to minimise errors and acts of fraud in inter-bank transactions.
Similarly, as part of its commitment to implement a monetary union in the East African Community (EAC) region, the central bank adopted the Tanzania Intra-Bank Settlement System (TISS) which enables it to processes high value and time sensitive payments in real time and gross settlement of payment instructions between banks.