CBN Warns Banks Against Issuance Of Substandard Cheques, Set To Sanction Offenders

The Central Bank of Nigeria has warned Deposit Money Banks (DMBS) and cheque printers and personalizers over the surge in substandard ‘Magnetic Ink Character Recognition line’ (MICR Line) in their cheques.

The Central Bank said it has observed a surge in the number of MICR Line rejects during check-related transactions.

The apex bank issued the warning in a circular dated October 9 addressed to Deposit Money Banks and published on its website on Tuesday.

MICR Line means the numbers, which may include the bank routing number, account number, cheque number, cheque amount, and other information, that are printed near the bottom of a cheque in magnetic ink in accordance with the Nigeria Cheque Standards.

The CBN said, “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, Deposit Money Bank (DMBs) are hereby directed to contact their personalizers and reiterate the need to revalidate the MICR code-line 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.

“Please note that the bank will monitor compliance with the provision of this circular and any bank with MICR reject starting from November 1, 2023 would be penalized in accordance with the Sanctions Grid.”

In August 2023, the CBN updated the list of its accredited cheque printers and personalizers as it seeks to ensure efficient payment and settlement.

The CBN had accredited six printers: Superflux International Limited, Triple Gee and Company plc, Yaliam Press Limited, Marvelous Mike Press Limited, Kas Arts Services Limited and Papi Printing Company Limited.

The personalizers are: Zenith Bank Plc, Eco Bank Plc, Stanbic IBTC Bank Limited, First Bank Limited, Keystone Bank Limited, Wema Bank Plc and Providus Bank Limited