CBN sets deadline for banks to resolve cheque issues
In an effort to improve the efficiency of the Nigeria Clearing System and reduce cheque rejections caused by Magnetic Ink Character Recognition code (MICR) issues, the Central Bank of Nigeria (CBN) has issued a ultimatum to banks.
This directive, outlined in a circular released on October 9, 2023, addresses the increasing concern regarding MICR rejects and their impact on the clearing system.
MICR rejects occur when cheques are declined by the clearing systems due to inaccuracies in the MICR code line.
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The MICR code line is a sequence of numbers and symbols located at the bottom of a cheque, which is essential for identifying the bank, branch, and account number associated with the cheque.
To tackle this issue, the CBN has instructed banks to collaborate with their personalizers and emphasize the importance of validating the MICR code line details for accuracy.
This directive aligns with the Nigerian Cheque Standards (NCS) and the Nigeria Cheque Printers Accreditation Scheme (NICPAS) version 2.0, released on September 18, 2018.
The CBN emphasized the significance of this ultimatum in reducing the growing number of MICR rejects. The circular states, “It has come to our attention that MICR rejects have been increasing, and in line with the bank’s efforts to reduce their numbers.”
The circular further directs “Deposit Money Banks (DMBs) to contact their personalizers and ensure the revalidation of the MICR code line details for accuracy in accordance with the NCS and NICPAS version 2.0.”
Both the banks presenting the cheques and those receiving them are advised to meticulously inspect their in-house cheque processing equipment, ensuring correct calibration and supervision.
This is to prevent any distortion of images and data during the cheque truncation process.
The CBN will closely monitor banks’ compliance with these instructions and non-compliance will result in penalties according to the prescribed sanctions grid.
The deadline for adherence to these measures is set for November 1, 2023.
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