The banking industry, under the auspices of the Bankers Association of Namibia, the Bank of Namibia and the Payment Association of Namibia, has implemented a five-day cheque clearing cycle, which was effective as from 1 April. This means that upon depositing a cheque banking customers will have access to their funds on their bank accounts within five working days anywhere in the country.

“This is a major improvement from the previous system where, in more remote areas, the cycle could take in excess of ten days,” the Bank of Namibia said in a statement.
All commercial banks have implemented the improved clearing system, operational and infrastructure changes and have re-aligned their clearing and settlement arrangements and business processes to facilitate the reduction of the cheque clearing cycle to five days, the central bank said.
“The reduction of the cheque clearing cycle will add value for customers, and remains a key objective of the payment system reform initiative undertaken by the Bank of Namibia and the banking industry. The improved clearing cycle will ensure efficiency and effectiveness of the National Payment System (NPS),” said Lionel Mathews, director of banking supervision at the Bank of Namibia.
The implementation of the Namibian code-line clearing (CLC) system for cheques in 2005, enabled the Namibian banking industry to receive final and irrevocable same day value for inter-bank cheque transactions, and has substantially reduced the uncleared cheques deposited. However, customer value is only realized between 7 and 21 days and in some instances even longer.
“Although the CLC system has brought significant benefits to banking institutions, no tangible benefits have been accrued to banks’ customer in terms of quicker access to funds deposited. Hence, the Namibian banking industry‘s decision to reduce the national cheque clearing cycle to five days,” said Ester Kali of the Payment Association of Namibia.
Kali said the introduction of the five-day clearing cycle will reduce the value date and funds available to customers, especially customers in remote areas of the country, by up to five days and would have been considered a worthy achievement brought about by diligent cooperative work of the Bank of Namibia, the banking industry and Namclear. The overall risk profile of the NPS will be mitigated, which will contribute to a more secure and robust NPS, while also reducing national and individual float values in the national interest.