Banks take up electronic payment system
Feb 28, 2007
COMMERCIAL banks have stepped up the usage of the real time gross settlement (RTGS) system as a payment method with volumes transacted in the clearing house amounting to sh180b per day.
By Sylvia Juuko
COMMERCIAL banks have stepped up the usage of the real time gross settlement (RTGS) system as a payment method with volumes transacted in the clearing house amounting to sh180b per day.
This amount represents about 80%-90% of the total daily transaction value.
“In 2005 before the RTGS system was introduced, about 100% of payment value was done through cheques and electronic fund transfers. This has gone down to about 10-20% of total transaction value,†said Elliot Mwebya, the director payments and settlements department at the central bank.
RTGS, is a payment system in which money is transferred from one back account to another instantly (in real time). It was introduced in February 2005.
Mwebya re-affirmed central bank’s earlier announcement that no cheques above sh20m will be allowed in the clearing house effective July 2.
He said during the bank’s monthly briefing in Kampala last week that the sh20m cap on cheques will strengthen risk management and improve payment systems in the region.
“In May 2005, the East African central bank governors with a view to improving efficiency and strengthening risk management in the region agreed to limit the amounts written on cheques,†Mwebya said.
He said the sh20m cap on cheques issued is expected to check fraud.
COMMERCIAL banks have stepped up the usage of the real time gross settlement (RTGS) system as a payment method with volumes transacted in the clearing house amounting to sh180b per day.
This amount represents about 80%-90% of the total daily transaction value.
“In 2005 before the RTGS system was introduced, about 100% of payment value was done through cheques and electronic fund transfers. This has gone down to about 10-20% of total transaction value,†said Elliot Mwebya, the director payments and settlements department at the central bank.
RTGS, is a payment system in which money is transferred from one back account to another instantly (in real time). It was introduced in February 2005.
Mwebya re-affirmed central bank’s earlier announcement that no cheques above sh20m will be allowed in the clearing house effective July 2.
He said during the bank’s monthly briefing in Kampala last week that the sh20m cap on cheques will strengthen risk management and improve payment systems in the region.
“In May 2005, the East African central bank governors with a view to improving efficiency and strengthening risk management in the region agreed to limit the amounts written on cheques,†Mwebya said.
He said the sh20m cap on cheques issued is expected to check fraud.