TheCable

The Central Bank of Nigeria (CBN) has directed banks to reduce the number of cheque rejections caused by magnetic ink character recognition code (MICR) or face sanctions from November 1, 2023.

In a circular dated October 9, 2023, but released on Tuesday, the CBN said MICR rejects have been on the increase, and affecting the efficiency of the Nigeria Clearing System.

The statement signed by Sam Okojere, CBN director, banking service department, said MICR rejects are cheques that are rejected by the clearing system because of errors in the MICR code line. 

The MICR codeline is a series of numbers and symbols printed at the bottom of a cheque that is used to identify the bank, branch, and account number.

Addressing the issue, CBN directed banks to contact their personalisers and reiterate the need to revalidate the MICR codeline details for correctness.

The financial regulator said the directive is in accordance with the Nigerian cheque standards (NCS) and Nigeria cheque printers accreditation scheme (NICPAS) version 2.0 issued on September 18, 2018.

“It has come to our notice that MICR rejects have been on the increase and in furtherance of the bank’s effort to reduce the number,” CBN said in the circular.

“DMBs are hereby directed to contact their personalizers and reiterate the need to revalidate the MICR codeline details for correctness in accordance with the NCS and NICPAS version 2.0.

“Furthermore, both the presenting and receiving banks should also thoroughly examine their in-house cheque processing equipment to ensure that they are properly calibrated and supervised to eliminate distortion of image and data being transmitted during the cheque truncation process.”

The apex bank said that close monitoring of banks’ compliance has begun, adding that defaulters will be penalised in accordance with the sanctions grid.