The Bankers Association of Zambia and the Bank of Zambia have recently joined forces in forming a new entity known as Zambia Electronic Clearing House Ltd. (ZECH), charged with automating the process of clearing inter-bank checks.
ZECH, funded with more than US$2 million, went operational last September and has been limited to Lusaka and Kitwe, the nation's two major cities, although it will be expanded. The electronic system processes checks using MICR (magnetic ink character recognition).
The system has dramatically speeded the clearing of inter-bank checks, a transaction that used to take well over 4 days even if the banks were all in the same town. Several Zambian banks are now issuing new checks bearing the MICR codes.