By Ayanna Kirton, Staff ReporterTHE REDUCTION in the cheque-processing period from six business days to three has had positive effects on commercial banks and most of their customers, Wednesday Business has been told.
"Customers are ecstatic," said Marlene Parker, a representative of the Jamaica Banker's Association (JBA). She said the former six-day clearing period, though inefficient, was initiated to avoid high incidence of fraud. In some cases it took up to ten days to process cheques.
In March 1999, however, findings of a JBA study recommended setting up an Automated Clearing House (ACH) network in Jamaica utilising new technology to enhance the efficiency of the system making it similar to those of more mature economies.
Automated Payments Limited, launched in 2002, was subsequently formed to operate the ACH with all the licensed commercial banks in Jamaica as the company's shareholders.
IMPROVED SYSTEM
Grace Kennedy's treasury manager, Anthony Dunn, said the reduced turn-around time for cheque clearing has helped to increase the speed with which funds can be accessed although the system has not fully reached international standards.
"From our perspective it has improved things have been going quite smoothly although we still have to get to international standards where cheques are cleared and funds can be accessed within a day," Dunn explained.
POSITIVE MOVE
Wednesday Business spoke to FirstGlobal Bank marketing representative yesterday who said the reduction of the cheque processing period has been a positive move particularly because of the benefits it presents to the bank's customers.
"Though there has been no major impact on banks," the FirstGlobal representative said, "the change certainly means something positive for customers." But a member of staff from the accounting department of a leading international company with substantial local operations said a shorter cheque processing period does not always have positive effects. The representative said it resulted in a high incidence of dishonoured cheques being issued to the company because debtors were unable to fulfil their financial obligations in such a short period of time.
See Friday's Financial Gleaner for more on this story.
