by Donella Hosten
Just over a year ago, the Eastern Caribbean Central Bank (ECCB) in collaboration with the Eastern Caribbean Currency Union (ECCU), launched the Eastern Caribbean Automated Clearing House (ECACH), a system put in place to efficiently improve and secure customers’ cheque processing times.
Prior to ECACH, the traditional processing time for cheques was 3 days, after which the receiver would usually be granted access to the funds by their respective banks. ECACH was designed to reduce the 3–day wait to a same-day transaction, as everything would be done through the automated clearinghouse, however, this has not been the case according to many customers.
At the initial launch of ECACH, banks informed their customers that they would need to have sufficient funds in their accounts when issuing cheques, due to the speediness of the transaction.
However, after almost a year of the ECACH, customers are still complaining about not having access to their funds until 3 days or more in some instances, despite issuers seeing their cash deducted immediately from their accounts.
So how is ECACH more effective and secure, if customers still have to wait the same number of days to access their monies?
Representatives from various banks insist that ECACH is fully functioning, however due to the risks of cheque fraud and their individual processing times, it is difficult to have these transactions completed on the same day.
President of the Eastern Caribbean Currency Union (ECCU) Bankers Association and the Grenada Bankers Association, Mr Roger Archer, in an exclusive interview with NOW Grenada affirmed that the Automated Clearing House has made cheque processing much faster. He said the banks are aware that some cheques are not being processed as quickly as they ought to be, but they are currently putting systems in place to resolve that.
Mr Archer went on to speak to the issue of cheque fraud, stating that priority is given to cheques of higher values because the verification process is a different. He said each bank would work with their respective customers in order to reduce their wait time, especially their longstanding customers.
Archer stated that there would soon be a second phase to the new automated system.
He said that cheque writing would eventually go away and be replaced by bank–to–bank transfers without the use of cheques. This reduces the opportunity for fraud and allows banks to manage compliance risks.
The President said banks are in direct competition with developing technology and they need to be able to respond and keep up–to–date and get through this process.
Notably, ECACH was launched in banks throughout the Eastern Caribbean making the cheque processing time at commercial banks within participating states the same as within the same country.
On 24 September 2015, ECACH was successfully launched in St Kitts & Nevis, and according to some customers there, cheques are processed in real-time.