Microfinance banks in the country will not find cashing third-party cheques, as a good number of banks are now rejecting them, BusinessWorld Intelligence can now reveal. The rejection is believed to be a ploy to keep the microfinance banks from dumping their deposits with the banks.
BusinessWorld Intelligence can reveal that while Wema Bank Plc had suspended clearing of third-party cheque of MFBs since the beginning of the year, Intercontinental Bank will commence its own by November. Before now, Intercontinental Bank do clear this cheque, but with its acquisition by Access bank as a subsidiary, the newly acquired bank has sent letters to MFBs informing them of the development.
Apart from the two banks, authoritative sources say other banks are secretly rejecting third party cheques, even as banks continue to request the affected microfinance institutions to have substantial deposit (placement) in their institutions, if truly they want their third-party cheques to be cleared.
The reason for the rejection, it was learnt, is to avoid fraudulent practices being perpetrated by the people, using microfinance banks to siphon billions of naira. In most cases, it was learnt that some cheques are cloned or stolen, and as a result, the clearing house face the consequence alone when such issues are detected. They were made to pay for the stolen cheque, while in some cases, were arrested by security operatives.
To avoid these consequences, banks have instructed microfinance banks they are corresponding with, to only receive cheques written in their names from customers, while those written in the names or company of customers of MFBs will be rejected by the clearing bank.
BusinessWorld Intelligence can also reveal that managers of microfinance banks are unhappy with this development and have vehemently rejected this policy, calling on the Central Bank of Nigeria (CBN) to come to their rescue.
At the recently concluded Committee of Microfinance Banks in Nigeria (Comfbin) meeting held in Ogba, Lagos, operators spoke with one voice, calling on the apex bank to call banks to order.
Mr Lukman Oyebamiji, managing director, Sapida Microfinance Bank, said in order to avoid fraudulent practices where MFBs are used to siphon billions of naira through third-party cheque, banks have taken this proactive measure to avoid bearing the consequence.
Third-party Cheque, he said, is a cheque not written in the name of a microfinance bank, but in the name or company of microfinance bank clients. According to him, “Some third-party cheques were stolen or cloned and as a result, the clearing house bears the consequence.
“But now, they (banks) expect that all cheques that will be sent to them for clearing should be written in the name of the concerned MFB.”
He added that some banks are ready to clear it, but the concerned microfinance banks must have substantial deposit in its correspondent bank, so that if there is a problem with the cheque, the bank will deduct from that deposit.
“We were mandated to fill indemnity form so as to indemnify the bank that whenever there is a problem with third-party cheques, such MFB will bear the consequence,” he said.