BoU invests sh3b in e-money transfer
Apr 03, 2007
BANK of Uganda has invested about sh3b towards installation of the electronic money transfer system called Real Time Gross Settlement (RTGS).
By Sylvia Juuko
BANK of Uganda has invested about sh3b towards installation of the electronic money transfer system called Real Time Gross Settlement (RTGS).
George Akampurira, an official at the bank, said: “The system is secure because it uses SWIFT, which is reliable and internationally recognised.â€
RTGS is a payment system in which money is transferred from one back account to another instantly It was launched in February 2005.
Before introduction of the system, cheques were used for payment and they would take about four days to mature. They are also prone to fraud.
“For a week. money is tied in a cheque. When the cheques are deposited in banks, they have to be physically presented at the clearing house at the Bank of Uganda the next day and then verified. This is inefficiency,†Akampurira said.
Akampurira said when cheques are verified, they can bounce because of insufficient funds or wrong dates.
“On average, between sh600m and sh700m per day of cheque value is returned unpaid. This represents about 3% of the value of the cheques that pass through the clearing house,†he said.
Akampurira said 80% of transaction values in the country are through the RTGS, while the cheque systems accounts for the 20%.
He said the sh20m limit on cheques that will be effected mid this year will improve efficiency of payment and settlement systems.
BANK of Uganda has invested about sh3b towards installation of the electronic money transfer system called Real Time Gross Settlement (RTGS).
George Akampurira, an official at the bank, said: “The system is secure because it uses SWIFT, which is reliable and internationally recognised.â€
RTGS is a payment system in which money is transferred from one back account to another instantly It was launched in February 2005.
Before introduction of the system, cheques were used for payment and they would take about four days to mature. They are also prone to fraud.
“For a week. money is tied in a cheque. When the cheques are deposited in banks, they have to be physically presented at the clearing house at the Bank of Uganda the next day and then verified. This is inefficiency,†Akampurira said.
Akampurira said when cheques are verified, they can bounce because of insufficient funds or wrong dates.
“On average, between sh600m and sh700m per day of cheque value is returned unpaid. This represents about 3% of the value of the cheques that pass through the clearing house,†he said.
Akampurira said 80% of transaction values in the country are through the RTGS, while the cheque systems accounts for the 20%.
He said the sh20m limit on cheques that will be effected mid this year will improve efficiency of payment and settlement systems.