The Bank of Uganda (BoU) launched a new automated clearing system that began operations on April 20, 2017. The system offers a fully automated clearing house with cheque truncation abilities. Cheque truncation entails transforming a physical cheque into a substitute electronic form.
“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,” BoU Governor, Emmanuel Tumusiime-Mutebile said.
The automated clearing system will replace the physical movement of cheques between banks, therefore, accelerating cheque clearance, the settlement among bank, and the realisation of funds.
Furthermore, the automated clearing house will decrease the time needed to clear a cheque to two days and eventually to one day. Therefore, the beneficiaries will receive their money faster than they used to.
The new system will also decrease the costs incurred during cheque clearing and the risk. This is because electronic clearing is less susceptible to fraud than physical cheque clearing. Uganda will also have access to a single centralised cheque clearing platform which will replace the current unaligned platforms.