Home Business CBN Sets Five-Year Timeline on Cheque Storage

CBN Sets Five-Year Timeline on Cheque Storage

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The Central Bank of Nigeria (CBN), has set a five-year timeline for banks to keep physical cheque presented to them by customers after which the instrument may be disposed.

This is contained in the Nigerian Bankers’ Clearing System (NBCS) Rules released yesterday by the apex bank. The policy is in line with the CBN’s exercise of the powers conferred on it under Sections 2 (d), 33 (1) (b) and 47 (2)oftheCBNAct2007— to promote a sound financial system, issue guidelines, facilitate the development of an efficient and effective payments system.

TheNBCS Rules,which took effect immediately, said any licensed bank that is not a member of the NBCS may enter into an agency agreementwithanymember – bankforthepurposeofaccepting cheques and other instruments drawn on it and for collecting cheques drawn on other banks.

Amemberbankmaybepen listedbysuspensionfrom participatinginclearing for such periods as shall be determined by the CBN for non-attendance of two consecutive meetings of the Committee, without a satisfactory reason communicated in writing within five working days before or after any scheduled meeting.

Eligible financial instruments for clearing purposes are paper-based payment instruments, such as cheques, managerscheques, drafts, dividend/interest warrants, debit/credit notes, bankerspayments.

Paper-based Payment Instruments deposited by the customer at any member bank shall be deemed paid by 10pm of the next working day (T+1) except where it is returned by the paying bank, a special caution or an extension of value date request has been received from the paying bank.

Asettlementbankshallmintainstrictconfidentialityinrespectofany confidentialinformationmade availabletoit pursuantto theirsettlementagency agreement and may not disclose same except with the express permission of the Non-Settlement Bank or as may be lawfully required.

Also, Settlement Bank shall not use any information provided by Non-Settlement Bankforanypurposeother thanaspermittedorrequired undertheAgency Agreement.

 

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