Regulatory Alerts2011-11-01 | BPS/DIR/GEN/CIR/002/015GUIDELINES FOR CHEQUE TRUNCATION IN NIGERIA
The Nigerian Cheque Standard Operating Procedures (SOPs) provide clear guidelines for banks to follow when dealing with cheques. These procedures aim at improving the efficiency of the clearing process and reducing fraudulent activities associated with the use of cheques. Here's a concise summary: 1. Banks shall send image data and MICR data of each item presented to them. The image data should be of high quality, legible, and must contain the full cheque details. 2. For remote deposit capture (RDC), banks are allowed to use scanned images, but they need to ensure the image quality is as good as the physical image. The MICR line, endorsement, and any other important information on the reverse side should also be clearly visible in the image. 3. Banks must verify the signature on the image of a cheque. If a bank chooses not to do so for cheques above a certain amount, it may bear the risk of paying some fraudulent instruments. 4. Banks are required to send their MICR data in an agreed format that aligns with the images provided by the paying bank. Any inconsistency between the data and the image could lead to incorrect settlements. 5. Banks must take adequate measures to ensure the security of payments, especially for high-value instruments. They should verify the signature on the cheque's image if they don't already do so for these instruments. 6. Sanctions are in place for violations of the SOPs. These include fines, suspensions from the clearing process, and joint liability with other parties involved in a transaction. 7. The timely return of unpaid cheques is also crucial. Failing to return an instrument within the stipulated time frame could lead to penalties for the banks concerned.