Bank of Uganda launches a new automated clearing house system
Effective April 20, 2018, Bank of Uganda (BoU) will begin operation of a new Automated Clearing System. 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,” said Governor, Prof. Emmanuel Tumusiime-Mutebile.
This will eliminate the physical movement of cheques between banks and across bank branches, thus speed up the process of cheque clearance, a settlement among banks and realization of funds by the beneficiaries.
Bank of Uganda says a fully automated clearing house will offer 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.
Other benefits will include a reduction in the costs and risks of cheque clearing, electronic clearing is less vulnerable to fraud than manual cheque clearing and the entire country will have access to a single centralized cheque clearing platform as opposed to the current decentralized and unaligned platforms.