THE Central Bank of Nigeria (CBN) has expressed worry over the increasing rejection of banks’ cheques, threatening sanctions on deposit money banks (DMBs) from November 1, 2023.
The apex bank stated this in a circular issued on Tuesday by its director of the Banking Services Department, Sam Okojere.
It said, “It has come to our notice that MICR rejects have been on the increase and in furtherance of the Bank’s effort to reduce the number, Deposit Money Bank (DMBs) are hereby directed to contact their personalisers and reiterate the need to revalidate the MICR code-line details for correctness in accordance with the NCS and NICPAS version 2.0.
“Please note that the Bank [CBN] will monitor compliance with the provision of this circular, and any bank with MICR reject starting from 1st November 2023 would be penalised in accordance with the Sanction Grid.”
Simply put, MICR (magnetic ink character recognition) is a character recognition technology used mainly by the banking industry to streamline the processing and clearance of cheques, and it is the coded numbers that appear at the bottom left of the cheque.
Concerned about the MICR rejection, CBN stated that the presenting and receiving banks should thoroughly examine their in-house cheque processing equipment to ensure that they are appropriately calibrated and supervised to eliminate distortion of image and data being transmitted during the cheque truncation process.
The apex bank had, in a circular issued on September 18, 2018, to DMBs, Accredited Cheque Printers/ Personalisers, and the Nigeria Inter-Bank Settlement System (NIBSS), approved the revised Nigerian Cheque Standard (NCS) and Nigerian Cheque Printers Accreditation Scheme (NICPAS) to commence February 1, 2019.
In January 2021, the CBN announced that NICPAS version 2.0 would commence on April 1, 2021, and the NCS/NICPAS 2.0 sanction grid would be operational on the same date.
The new date was an extension from the earlier deadline of January 1, 2021, which was due to the outbreak of the COVID-19 pandemic and the impact it had on the NCS and NICPAS version 2.0 project.
In August 2023, CBN updated the list of its accredited cheque printers and personalisers for efficient payment and settlement.
The accredited six printers are Superflux International Limited, Triple Gee and Company Plc, Yaliam Press Limited, Marvelous Mike Press Limited, Kas Arts Services Limited and Papi Printing Company Limited.
Similarly, institutions accredited as personalisers are Zenith Bank Plc, Eco Bank Plc, Stanbic IBTC Bank, First Bank Nigeria, Keystone Bank Limited, Wema Bank Plc and Providus Bank Limited.