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Sierra Leone News: BSL adopts modernized payment system

2The Bank of Sierra Leone (BSL) has introduced a new payment system aimed at reducing the current clearing cycle for cheques and increasing.
The new modernized payment system is an automated platform that relies on an interconnected virtual network hosting the country’s financial institutions.
Explaining the new system to high value customers of Commercial Banks yesterday, Alfred Samah, the Assistant Director Banking Department and Head of Payment Systems and Control Division at the Bank of Sierra Leone, said that the new system is part of the  payment and development project funded by the African Development Bank (ADB).
The objective of this system, he stated, is to develop the national payment system to the levels of Nigeria and Ghana, which are far advanced in terms of this payment system.
He explained that the system has automated the cheque processing system and the clearing house system and has also automated the settlement of transaction and the security transaction dealing with Treasury Bills and Treasury Bonds.
Samah added that in the past, for cheques specifically, it took three days for in-town cheques and ten days for up-country cheques to be cleared.
He noted that with this new automated system, “the cheques will now take a maximum of 48 hours (2 days) to clear regardless of the location or branch of the commercial bank,” he stated.
The Head of Payment Systems and Control Division assured that for real time, gross settlement system transaction is prompt; adding that the system only accommodates cheques valued at Le 50,000,, 00 (fifty Million Leones), as it will not accommodate cheques with amounts that exceed that amount.
He advised for a customer to transact business above the Le 50, 000, 000 threshold in an instance, one has to use the facility within the real time gross settlement system since it is prompt.
Samah noted that the system has lots of benefits especially for the business sector because in the past, transactions processing used to take  three days and ten days for cheques, which he said have been cut down considerably and making the process faster. He disclosed that laws have already been put in place to guide the transaction setting and process.
He warned against instances of issuing cheques when the issuer is fully aware that the account from which the money is to be withdrawn has no money. He said culprits will face “the full penalty of the law” in such circumstance. He also warned against forgery of signatures reinstating that anyone caught in the forgery of somebody’s signatures on a cheque to withdraw money from the system, that individual will also face “the full penalty of the law”.
These he maintained are some of the benefits of the system, adding that it also cuts on cost and ensures efficiency and confidence in the business sector.
Explaining further, he noted that the new payment system is part of the West African Monetary Zone (WAMZ) payment system which covers Sierra Leone, Guinea, Liberia and The Gambia, one of the prerequisites for the ECOWAS single currency.
He said after they would have developed the payment system, these four countries including the WAMZ Committee of Governors will meet again to come up with a proposal to integrate this national payment system which will lead to the establishment of a Central Bank which will facilitate trade among ECOWAS countries.
Clement Dodoo, Managing Director Ecobank-Sierra Leone Limited who doubles as President of the Sierra Leone Association of Commercial Banks (SLACB) said that this system is good and will boost trade.
“We are moving towards an efficient payment system which is safer and reliable,” Dodoo said, and called on all and sundry to embrace the system. He described the new payment system as “a massive improvement” that will prevent those who don’t have money in their account to write cheques.
Deputy Bank Governor, Andrina Coker said the Central Bank decided to automate the payment system in order to meet up with other countries in the ECOWAS region.
By Abibatu Kamara
September 30, 2013

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