http://www.nation.co.ke/...1/-/xhd420/-/index.html
How idiotic that government departments were caught flat-footed regarding RTGS rules when a government arm (CBK) was in charge of the process!!!
A cash crisis has hit civil servants’ cooperative societies after the government banned cheques with a value of more than Sh1 million. All payments of more than Sh1 million are supposed to be made using a new computer software,which many government ministries did not have.
Two weeks after the ban,they continued paying sacco members’ contributions through cheques,which the saccos can’t cash in the old way.
New policy
Cooperatives — which serve over 60,000 civil servants — could not make payments totalling Sh1.3 billion because ministries had not complied with the new policy introduced by the Central Bank of Kenya.
The bank prohibited the payment of amounts exceeding Sh1 million through cheques with effect from October 1. The rule was meant to enhance safety by reducing cheque fraud and increasing efficiency in the payment process.
On Wednesday,officials from various saccos told the Daily Nation that CBK was meant to have installed the computer software in all ministries by October 1. However,it had not done so on time and for two weeks,the ministries continued to issue cheques to the cooperatives.
An official of Jamii Sacco,who refused to be named fearing victimisation,said failure to put in place the proper systems in good time had caused a cash-flow crisis among civil servants,farmers,schools,and Jua Kali (informal sector) industries.
Cash-starved
He said cash-starved saccos had a difficult time explaining to distressed members who needed money for emergencies like medical care and funerals why they can’t be paid. “In two weeks alone,a sacco transacts not less than Sh30 million,” one official said. According to him,there are more than 50 saccos whose members are civil servants,bringing their estimated transactions to about Sh1.5 billion.
He said the delays could have put smaller saccos to near ruin since the cheques they received as members’ contributions or loan repayments could not be cleared. The Union of Kenya Civil Servants secretary general,Mr Tom Odege,has also protested. “Some members have literally been grounded,” he said during the Public Service Week.
The notice was issued in June by the Central Bank of Kenya in agreement with the Kenya Bankers Association barring high value payments using cheques and Electronic Cash Transfers. The two means of payment were restricted to settling amounts not exceeding Sh1 million.
Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett