CBN to sanction banks over cheque rejection from November 1

The Central Bank of Nigeria (CBN) on Tuesday said it would, from November 1, 2023 begin to sanction banks over rejection of ‘Magnetic Ink Character Recognition line’ (MICR Line), which it called MICR reject, in cheque related transactions.

The apex bank disclosed this in a circular to all deposit money banks (DMBs), titled, ‘The Revised Nigeria Cheque Standards (NCS) and Cheque Printers Accreditation Scheme (NICPAS): MICR Reject’, and signed by Sam Okejere, director, banking services department.

MICR Line refers to the numbers, which may include the bank routing number, account number, cheque number, cheque amount, and other information, printed on a cheque in magnetic ink in accordance with the Nigeria Cheque Standards.

Nigeria’s Central Bank issued the Nigerian Cheque Standards and Nigeria Cheque Printers Accreditation Scheme, version 2.0 on September 18, 2018 to increase the efficiency and security of the Nigeria Clearing System.

To reduce the surge in MICR reject, the CBN directed the banks to reach out to their personalisers to revalidate the MICR code-line details for correctness in accordance with the NCS and NICPAS version 2.0.

Part of the circular reads, “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.”

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“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 January 2021, the CBN announced that NICPAS version 2.0 would commence April 1, 2021 and the NCS/NICPAS 2.0 sanction grid will be operational on the same date.

The new date was an extension from the earlier deadline of January 1, 2021. The extension of the deadline was due to the outbreak of Covid-19 pandemic and the impact it had on the NCS and NICPAS version 2.0 project.

In August 2023, the banking and finance sector regulator updated the list of its accredited cheque printers and personalizers for efficient payment and settlement.

Consequently, the accredited six printers include Superflux International Limited, Triple Gee and Company plc, Yaliam Press Limited, Marvelous Mike Press Limited, Kas Arts Services Limited and Papi Printing Company Limited.

According to the CBN, the personalizers are Zenith Bank Plc, Eco Bank Plc, Stanbic IBTC Bank, First Bank Nigeria, Keystone Bank Limited, Wema Bank Plc and Providus Bank Limited.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.