Tanzania: Central Bank reduces cheque maturity time

THE Central Bank is working out plans to cut short bank-to-bank cheque transaction time from the average five days down to 24 hours, to the convenience of bank customers.

Briefing visitors at the Bank of Tanzania (BoT) pavilion during the ongoing 35th Dar es Salaam International Trade Fair (DITF), the BoT Principal Economist, Alli Liyau said on Saturday that restructuring of cheque clearing would increase efficiency.

“Time taken for cheques to be cleared ranges between three to five days. This is not proper and clearance must be expedited like other payments,” Mr Liyau said.

He said BoT had restricted payments by check not to exceed 10m/- to encourage use of Real Time Gross Settlement System which is recommendable and safe.

He said through RTGS which is an interbank’s payment system under Tanzania Interbank Settlement System (TISS), payments above 10m/- can be effected.

Liyau pointed out that through a National Payment System, the central bank issues directives as regulatory authority of the banking sector.

BoT pavilion which was this year ranked as third winner in the newly introduced Trade and Services Sector, had many visitors asking questions related to efforts by the central bank to control inflation reflected on rapid depreciation of the local currency, the Tanzanian shilling.

“It is true that people want the Central Bank to intervene and help stop decline of the currency, which is very difficult because the market force determines the value of the local currency,” said Zalia Mbeo, the Acting Public Relations and Protocol Manager.

She said while a depreciating shilling is a problem to importers, exporters benefit from such scenarios, hence unfair for BoT to intervene when one group of local producers are negatively affected.

Visitors also wanted to know about the newly introduced bank notes, mobile phone banking services and its regulation.

“We swap worn out bank notes and also the old bills for new ones, which seem to be popular among our visitors,” said Ms Mbeo.