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Cheque printing: Accredited firms may not meet local demand

By on June 2, 2013

There are indications that the recent decision by the Central Bank of Nigeria, CBN, to accredit only two local firms to print 300 million cheques and other security paper instruments for the  22 banks in the country may  not be  the  best  economically due to lack of capacity by the firms to meet the demand of banks.

The CBN,  in collaboration with the MICR Technical Implementation Committee,  conducted the accreditation and re-accreditation exercise of cheque printers in Nigeria in line with the Nigeria Cheque Printers’ Accreditation scheme qualification criteria. At the end of the exercise,  only two local printers were selected.

Nigerian Security Printing and Minting Plc was curiously  delisted at the end of  the accreditation and re-accreditation exercise.

Prior to the circular (BPS/DIR/CIR/04/2013) to “Deposit Money Banks, Cheque Printers and other Stakeholders on the the Accreditation of Cheque Printers for 2013/14”, signed by Dipo Fatokun, Director, Banking and Payments System Department of CBN, dated May 9, 2013, findings  revealed that the accredited firms  printed only a fraction of cheques used by banks in the country.

Security printing firms print cheques, certificates, and other valuable documents. Until the new regime, a significant percentage of such printers were foreign-based. Businesses in the country were executed via their intermediaries, known as brokers.

Stakeholders in the sector believed that the implication of the apex bank’s decision will be chaos  economically, citing the  capacity  of the accredited firms to  meet the demands of the  banks.

Delisting 13 firms with the exclusion of foreign printing firms by the CBN, according to findings, has increased the production burden of the accredited firms to print cheques and other security paper instruments.

The  CBN, in the circular, stated that the reason behind the non- re-accreditation of foreign based printers  was in line with the bank’s policy to domesticate cheque printing in Nigeria, adding that all banks are,  by the circular, reminded to patronise only the CBN accredited cheque printers.

Some stakeholders, who spoke on the condition of anonymity,  said the CBN’s policy to domesticate cheque printing in the country is a welcome development.

“It is a welcome development to domesticate cheque printing in the country because it will lead to healthy competition and a reduction of prices as seen in other sectors of the economy.  However, foreign printers should be allowed to build a strong customer base because they are willing to invest in Nigeria, but insecurity, lack of stable power supply may hinder them to come in and invest,” a stakeholder said.

“I am sure that these investors (delisted printers)will require extension of time-line that will enable  them initiate their projects for  local production.

“Putting the printing of cheques and other security document in the hands of two printing firms to meet the demands of all the banks in the country will only take us back to the early days of banking when customers will have to wait for as long of six months or more before they can receive their cheque order. ”

The delisted foreign printers include: Kalamzoo Secure Solutions Ltd, Birmingham, England; Security Print Solution, UK; CFH Total Document Mgt Ltd, England: Smith and Ouzman Ltd, England; Tall Security Print Ltd, England; A1 Trade  Print Services, England; Papi Pinting Coy Ltd, UK; Corrinum Continous Ltd, UK; Euphoria Comm. Ltd, UK; and DLRS Group, Ireland. Others are Camelot Ghana Ltd, Accra, Ghana; and Shave and Gibson Group based in South Africa.

It would be recalled that the apex bank initiated NICAPS as part of the Federal Government’s local content enhancement policy, to  stimulate indigenous entrepreneurship.