New, safer cheques on the make

The National Bank of Ethiopia (NBE), the supervisory organ of financial institutions, is set to introduce Magnetic Ink Character Recognition (MICR) embedded cheques, a character recognition system that uses special ink and characters in view of standardizing the country’s bank cheque system starting from early January 2014.
The new standard, which will see bank cheques incorporate enhanced security features, will also help solve problems that come along with counterfeit cheques and other unwanted tampering.
“Currently cheques are validated and passed manually. The account numbers had to be manually validated and tagged. This has created a lot of problem for the banks,” one banker said. “MICR is a magnetic code that is printed at the bottom of the cheque. When the cheque is placed under an MICR reader, the machine would automatically identify the account number and details of the person who issued the cheque,” the banker explained.
Numbers and characters found at the bottom of cheques (usually containing the cheque number, sort number, and account number) are printed in Magnetic Ink with a laser printer using MICR toner.
The Central Bank called on interested bidders with a capacity to print a minimum of one million leafs at a time to participate in the tender. Printing cost is expected to be covered by each banks. The new cheques will have an enhanced security system as they will be printed electronically, unlike previous models, will have the same standard and only be differentiated by the logos of the particular bank to which they belong.
Currently all local banks print their cheque through the long-standing public printing press Berhanena Selam Printing Enterprise.
According to our sources, banks across the country have been instructed by the central bank to stop printing new cheque until further notice.
Banking experts said that standardization of the cheque system would vastly aid the speedy realization of the country’s development as it creates reliable and trusted business transactions between customers and their respective banks.