Another step towards moving the country to a cashless economy took centre stage as Craft Silicon launched unveiled a software that in the temporary era will enable Centenary Bank and Finance Trust Bank customers be able to access real time money transactions between Shs500,000 to Shs5m.
The technological development was ushered in on Monday by the Kenyan-based software, launching the inter-bank transfer system.
Speaking at the launch of the Instant Interbank Transfer system in Kampala, Mr Kamal Budhabhatti, the Craft Silicon chief executive officer, said there was need to leverage on new technology in order to promote conventional banking that is both convenient and less costly to customers.
“Banks at the moment need new innovations to drive the agenda and any such innovation should be utilised to ease banking,” he said.
Craft Silicon, which was founded in 1998, is a Kenyan software company that provides customised banking to more than 250 customers (banking institutions) in about 40 countries including India, Nigeria and US, Uganda and Kenya.
In Uganda it currently has Centenary Bank and Finance Trust Bank on its platform but hopes to recruit more financial institutions such as Housing Finance Bank, Tropical Bank and Exim Bank, among others.
Mr Benedict Ssekabira, the Bank of Uganda executive director for commercial banking, said such innovations come at the right time when the Central Bank is seeking ways through which it can promote e-payment systems, such as online banking and mobile money transfer services to reduce the use of paper notes.
“You travel to Europe and you see ATMs in every corner. We also want to have such services. That is the only way we can reduce the use of paper money in the payment system,” he said.
Uganda, just like the rest of Africa, largely depends on paper money as the main avenue of payment due to limited technology and low inclusion in terms of banking.
However, access to new technology such as online payment and mobile money services have been a key driver that continues to present a payment revolution, especially in East Africa.
Uganda at least has more than 10 million mobile money subscribers, transacting more Shs24 trillion per month.
Mr Fabian Kasi, the Centenary Bank managing director, said they will leverage on the Instant Interbank Transfer system to provide risk free and lest costly money movement ranging from Shs500,000 and Shs5 million.
“We have to move with at the same speed with technology in order to create customer-centred products. Even if it needs us to get into synergies we shall get there provided it is done for the good of our customers,” he said.
Finance Trust Bank executive director Dennis Kakeeto, said they will in the interim allow movement of between Shs500,000 and Shs1 million but with plans to improve on the amount as and when need may arise.
Interbank transfer, Mr Budhabhatti said, is the next chapter in the evolution of banking because it allows “instantaneous transfer of funds from one bank to another through highly advanced technical innovations.