The Central Bank of Nigeria (CBN), on Monday, announced that all deposit money banks in the country and the Nigerian Interbank Settlement System (NIBSS) are to suspend the clearing of all cheque instruments in the Nigerian Clearing System, starting from today March 31st, 2020.
According to a statement that was signed by the apex bank’s Director of Banking Services Department, Sam C. Okojere, which was seen by Nairametrics, the directive is intended to “ensure hitch-free clearing and settlement activities” during the 14-day lockdown that started last night.
What this means: Following the directive, which took effect today, new cheques will no longer be allowed to pass through the Nigerian Clearing System which is overseen by the NIBSS.
In other words, deposit money banks are to stop accepting fresh cheques that require to go through the clearing system. That said, settlement activities will continue for already existing cheques that are lodged into the clearing system prior to the suspension.
How the Nigerian Clearing System works: The Nigerian Clearing System integrates all the banks in the country, making it possible for customers of different banks to easily clear cheques issued to them by other account holders who do not necessarily bank with the same financial institution.
For example, when a Zenith Bank customer issues a cheque to a GTBank customer, the GTBank customer can easily deposit the cheque in a GTBank branch.
By doing so, the cheque is cleared through the Nigerian clearing system, thereby making it possible for the GTBank customer to get the value of the cheque transferred into their bank account.
Following the suspension, therefore, Nigerians will no longer be able to clear cheques issued to them by third party bank account holders; until further notice. Again, this is all part of efforts to ensure a hitch-free settlement activities during the lockdown period.
Recall that the Federal Government of Nigeria declared the 14-day lockdown on Sunday, as part of efforts to contain the Coronavirus pandemic which has recently begun to spread across most parts of the country.
Already, the CBN, in an earlier press statement, disclosed that it had obtained permission from the presidency to enable “skeletal operations” by banks. This is in a bid to meet the emergency financial needs of Nigerians during the lockdown period.