More Kenyan banks affected as De La Rue stops printing chequebooks
British multinational printer De La Rue’s offices in Ruaraka, Nairobi, in March 2012.
What you need to know:
- Banks urged customers to stockpile chequebooks as they looked for alternative vendors.
- Equity Bank already said it was sourcing another vendor to tender similar services.
The disruption caused by the decision of banknote printer De La Rue to freeze its Kenyan operations has widened as more banks urged customers to stockpile chequebooks as they looked for alternative vendors.
In the latest development, Citi Bank has notified its clients that De La Rue intends to cease printing cheques for the bank starting April. This comes about a week after Equity Bank issued a similar notice to its customers, giving those in need of huge stocks up to February 15 to make sufficient orders.
In the notice by Citi Bank, the lender has given its clients until February 28 to make requests for additional stocks as De La Rue will no longer print after March 31.
“De La Rue, Citi Bank’s cheque printing vendor in Kenya, has notified us of their intention to cease offering this service effective March 31, 2023. We are engaging with our stakeholders to confirm the validity period for cheques printed by De La Rue after this vendor ceases operations and shall provide further information in due course.
Citi Bank says it is working to support affected customers' access to electronic payment services as a recourse, even as those who need more stocks are given a window to make orders.
“Clients who currently use cheques for their operations are advised to make orders for additional stock as soon as possible and by February 28, 2023, at the latest. We shall unfortunately not be able to process orders received after this date,” the lender stated.
The lender, however, noted that it will continue to support cheques issued by other banks and paid to its clients even after De La Rue ceases its cheque printing operations.
“Citibank will discontinue offering corporate and banker’s cheque issuance services as part of our product portfolio upon the expiry of the acceptance period for the De La Rue printed cheques. We shall support migration to electronic modes of payment such as electronic funds transfer, real-time gross settlement, pesalink instant payments, and mobile money payments through M-Pesa,” it stated.
The new development indicates the spiraling effect following De La Rue’s move to close operations in the country, which could face customers across the banking sector, with huge disruptions expected before lenders get an alternative.
Business customers, which use cheques to make payments, will be the most hit by the shortage of cheques should the situation escalate.
Equity already said it was sourcing another vendor to tender similar services following the banknote printer’s exit.
“We have already embarked on sourcing and onboarding another vendor to tender similar services,” Equity stated.
