The Central Bank of Nigeria (CBN) in a circular to all Deposit Money Banks (DMBs) and the Nigeria Inter-Bank Settlement System (NIBSS), has lifted the temporary suspension placed on cheque clearing across the country with effect from Tuesday, April 28, 2020.
Signed by Sam Okojere CBN’s Director in the Banking Services Department, the circular read: “in furtherance of its efforts in the development of a safe and efficient payment system in Nigeria,” the apex bank has decided to lift the suspension. In collaboration with relevant stakeholders, CBN revealed: “the need for cheque clearing to accommodate users of cheque as one of the payment instruments in Nigeria, despite the lockdown of some states and the Federal Capital Territory (FCT).”
Subsequently, CBN stated that in view of the new development, all cheque instruments will be allowed to pass through Nigeria’s clearing system henceforth. DMBs are therefore encouraged to advise their customers accordingly with this new directive. According to Nigeria’s apex bank, the initial suspension clearance for all cheque instruments across the country on March 31 was intended to “ensure hitch-free clearing and settlement activities” during the previous 14-day lockdown.
The NIBSS reports that the adoption of cheques across Nigeria is phasing out. In 2016, the total number of cheques used was 11.7 million, the figure dropped to 10.8 million in 2017 and it took a further dip in 2018, slipping to 9.02 million. Nevertheless, in early 2019, 2.44 million cheques were issued by corporate organizations as a payment instrument for suppliers, utility bills, services, and other essentials.
With the Nigerian economy currently threatened by cash shortage, the temporary suspension lift on cheque payment will encourage the circulation of money especially through companies that rely heavily on its advantages. Cheques are known to be easily traceable and can not be cashed by anyone, this is because banks monitor cheques closely and make a copy every time they are used. Similarly, despite the one-week extended lockdown in Lagos, Ogun, and the FCT, cheques can be drawn in any place at any time.
In the following days, banks are expected to commence clearing of cheques via their designated clearinghouses. A notice from Fidelity Bank Plc. to its customers reads: “Further to our earlier communication on the temporary suspension of Cheque Clearing by the CBN, please be informed that the suspension has been lifted,” therefore accomodating fidelity cheque users.
Additionally, bank staff that specializes in the clearing of cheques will be resume work as signatories of corporates companies, and individuals will take advantage of the temporary suspension lift to carry out pending cheque payments.
