Digital system to ease Govt payments
Jul 05, 2007
GOVERNMENT employees and suppliers countrywide will get their salaries and payments respectively within 24 hours after release of the money. This follows implementation of the Electronic Funds Transfer (EFT) system, which limits payment of cheques above sh20m, effective July 2.
By David Muwanga
GOVERNMENT employees and suppliers countrywide will get their salaries and payments respectively within 24 hours after release of the money, a statement from the central bank has said.
This follows implementation of the Electronic Funds Transfer (EFT) system, which limits payment of cheques above sh20m, effective July 2.
According to the statement, the use of a fast, secure and timely funds transfer system would lead to more efficiency, security and savings.
“The measure is intended to reduce risks associated with big cheques that include issuing a cheque even when there is no money on the account plus forgeries and fraud,†said the statement.
“The implementation of the EFT is intended to strengthen the management of risks and enhance efficiency of the East African payment systems in compliance with a directive from the Monetary Affairs Committee of the East African Community,†the statement explained.
Governors of the three East African countries agreed to put limits on cheque amounts.
Some types of the EFT include credit and direct debit transfers. Credit transfers are used by corporate customers to pay salaries, interest or dividends.
Direct debit transfer is being introduced gradually for payment of utility bills, school and tuition fees.
In order to strengthen the payment system, the Bank of Uganda on February 21, 2005, implemented a large value payment system called the Real Time Gross Settlement (RTGS) System.
RTGS settles a transaction immediately. Each payment instruction is handled individually. Once the RTGS instructions have been effected, the settlement is final and irrevocable.
However, EFT transactions are collected throughout the day and sent in the clearing house the following day in batches.
GOVERNMENT employees and suppliers countrywide will get their salaries and payments respectively within 24 hours after release of the money, a statement from the central bank has said.
This follows implementation of the Electronic Funds Transfer (EFT) system, which limits payment of cheques above sh20m, effective July 2.
According to the statement, the use of a fast, secure and timely funds transfer system would lead to more efficiency, security and savings.
“The measure is intended to reduce risks associated with big cheques that include issuing a cheque even when there is no money on the account plus forgeries and fraud,†said the statement.
“The implementation of the EFT is intended to strengthen the management of risks and enhance efficiency of the East African payment systems in compliance with a directive from the Monetary Affairs Committee of the East African Community,†the statement explained.
Governors of the three East African countries agreed to put limits on cheque amounts.
Some types of the EFT include credit and direct debit transfers. Credit transfers are used by corporate customers to pay salaries, interest or dividends.
Direct debit transfer is being introduced gradually for payment of utility bills, school and tuition fees.
In order to strengthen the payment system, the Bank of Uganda on February 21, 2005, implemented a large value payment system called the Real Time Gross Settlement (RTGS) System.
RTGS settles a transaction immediately. Each payment instruction is handled individually. Once the RTGS instructions have been effected, the settlement is final and irrevocable.
However, EFT transactions are collected throughout the day and sent in the clearing house the following day in batches.