Bank of Uganda promotes electronic payment systems over cheques

9075 Views Kampala, Uganda

In short
Makanga said Bank of Uganda is encouraging the public to use other quicker and reliable payment systems like Real Time Gross Transfer System (RTGTS), Electronic Funds Transfer (ETF), the Electronic Clearing System (ECS) and the newly introduced Uganda National Interbank Settlement (UNIS), among others.

Still using cheques for your financial transactions? Bank of Uganda is now actively discouraging reliance on the cheque as a payment system saying it is risky and inefficient.
 
Bank of Uganda’s IT specialist Deborah Makanga told business people in Kampala that cheques are prone to fraud and that is why they take long to mature because they are subjected to rigorous, manual verification in a central clearing house.
 
She was responding to complaints by the business community why cheques cannot be made to clear very fast since most parties use the same banks and operate in the same markets and economy.
 
Makanga said cheques also have other negative effects on the financial system, explaining that in case a cheque bounces it affects the entire transaction process. She said that explains why the penalty for bounced cheques is high.
 
Makanga said Bank of Uganda is encouraging the public to use other quicker and reliable payment systems like Real Time Gross Transfer System (RTGTS), Electronic Funds Transfer (ETF), the Electronic Clearing System (ECS) and the newly introduced Uganda National Interbank Settlement (UNIS), among others.
 
She said that way the business community and the general public will reduce the time of their cash transactions, which is good for business.
 
Makanga also said they are encouraging the commercial banks to innovate further, especially in the usage of debit cards like ATMs as well as credit cards. Already a few banks use credit cards while ATM usage is widespread.
 
Meanwhile Ben Sekabira, the executive director for supervision, said well-designed and functioning payment systems contribute to economic development by ensuring efficient distribution of money in all sectors of the economy.
 
Sekabira also said an efficient payment system reduces the cost and uncertainty of financial settlements which could impede economic activities.
 

 

Mentioned: bank of uganda bank

About the author

David Rupiny
In his own words, David Rupiny says, "I am literally a self-trained journalist with over 12 years of experience. Add the formative, student days then I can trace my journalism roots to 1988 when as a fresher in Ordinary Level I used to report for The Giraffe News at St Aloysius College Nyapea in northern Uganda.


In addition to URN for which I have worked for five years now, I have had stints at Radio Paidha, Radio Pacis, Nile FM and KFM. I have also contributed stories for The Crusader, The New Vision and The Monitor. I have also been a contributor for international news organisations like the BBC and Institute for War and Peace Reporting. I am also a local stringer for Radio Netherlands Worldwide.


I am also a media entrepreneur. I founded The West Niler newspaper and now runs Rainbow Media Corporation (Rainbow Radio 88.2 FM in Nebbi). My areas of interest are conflict and peacebuilding, business, climate change, health and children and young people, among others."