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Banks move to online cheque clearing

Physical movement of cheques will soon be an old school thing. The Kanya Association of Bankers has signed an agreement with safaricom to provide data connection to all 42 banks in Kenya using its fiber optic data connection, thereby doubling up the speed of clearing cheques.

Online cheque clearing, commonly known as Cheque Truncation System (CTS) is an online image based cheque clearing system where an image and the magnetic character recognition are captured and sent electronically.

Banks and customers will benefit greatly since the time, transportation and collection cost will be reduced. Under normal circumstances it takes up to 10 days for a cheque to be cleared using the manual clearing system.

The installation of the new system will cost about Kshs. 600 million and ready to roll in the first week of June.


One of the major concerns that the customers might have is security, how will the banks ensure that the transactions are not know to the third party? there are a few enough security featuers that most banks will rely on when it comes to CTS, a major one being Publickey infrastructure (PKI).

PKI is a form of certificate authorization using the (PKC) public key cryptography which is a method of transforming a message so that it can only be visible by the intended recipient, this will make it a very difficult task for the hackers to crack the codes since many different attributes are used for the PKI, these include, but not limited to; validity conditions of the cheque, the specific public key used for the transfer, the agreements on the bank account etc.

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