- As customers adopt e-payment channels
There is a drop in the volume and value of issued cheques to N367 billion in one month, thanks to customers’embrace of e-payment channels and less reliance on cheques.
Data from the Nigeria Interbank Settlement System (NIBSS) on cleared cheques showed that banks cleared 628, 628 cheques worth N367.77 billion in January, this year.
According to the payment service firm, the transactions were less than 652, 412 deals worth N391.65 billion in the preceding month.
Also, 597,485 cheques worth N344.19 billion were cleared last November and 686,133 cheques worth N371.23 billion were cleared the previous month, NIBSS data further showed.
The drop in volume and value of cheques issuance followed Central Bank of Nigeria’s (CBN’s) policy, which stopped banks from allowing more than N10 million to be drawn on a cheque. It said the aim was to strengthen the e-payment system.
Big ticket transactions, previously sealed with cheques are moving to NIBSS Instant Payment portal where 111,345 deals worth N10.29 trillion were recorded in January. There were 126,567 transactions worth N10.73 trillion last December.
The NIBSS Instant Pay transaction volume and value further dropped to 109,556 and N9.6 trillion in November, which were still higher than 106,512 transactions worth N9.33 trillion last October.
Analysis of NIBSS transaction flows showed that a larger part of banking transactions are now consummated on the Central Bank Inter-Bank Funds Transfer System (CIFTS) and Real Time Gross Settlement (RTGS) platform.
The RTGS, an automated online payment system allows funds transfer from one bank account to accounts in another bank on the same day under the Nigeria Interbank Settlement System (NIBSS) platform.
The NIBSS Electronic Fund Transfer (NEFT) allows funds to be received after 24 hours and is either initiated from electronics means from customer’ convenience or at the initiating banks’ branch.
The CBN pegged maximum cheque issuance at N10 million, to ensure that majority of the transactions are moved to e-channels.
“As a further step in its efforts at enhancing the efficiency of the payment system in the country, the CBN hereby sets a maximum limit on cheque payment at N10 million with effect,” the CBN said.
“To this end, any payment value exceeding N10 million are made through the e-payment mode such as the Central Bank Inter-Bank Funds Transfer System (CIFTS) or Real Time Gross Settlement (RTGS), an automated online payment system which allows the transfer of funds from one bank account to accounts in another bank on the same day.
The maximum limit serves as a risk reduction measure in the clearing and settlement arrangement in line with international best practice. To support this initiative, deposit money banks are implored to properly educate their customers on the implementation procedure.
In the statement informing its customers of the new policy and the way it works, the bank explained that one of the e-payment options available to any customer exceeding N10 million stipulated limit is RTGS.
The bank said in the statement that RTGS is available at any of its bank branches on working days between 8.30am and 1.00pm. Transfer requests received after the cut off time of 1.00pm are processed on the next working day.
