The National Bank of Rwanda is set to introduce computer-readable cheques as it steps up efforts to curb theft and fraud that are rampant in local banks.The new cheques, which will be launched early next year, are aimed at also improving payment systems in the country.Central bank Governor, Amb. Clave Gatete, made the announcement last week during the bank’s financial stability committee meeting. He noted that the issuance of the new cheques will be handled under the cheque truncation project of the central bank.Cheque truncation is process of stopping the flow of the physical cheques issued by a drawer at some point with the presenting bank en-route to the drawee bank branch.The system will effectively eliminate the associated cost of movement of physical cheques. It will also reduce the time required for their collection and bring about sophistication to the entire cheque processing activity.In a telephone interview with Business Times, the Managing Director of Kenya Commercial Bank Rwanda, Maurice Toroitich, said that with the new system, banks will not be required to go to the clearing house for settlement rather, this would be done electronically. "It’s more effective, payment is made easy and its one of the major processes towards a cashless economy,” he said.The new cheque will reduce potential risks of cheque substitution, bankers said."We are seeing more theft, a thing we have not seen before; thus we have to be ahead of them through such systems,” said Toroitich.The new cheque will have new and more sophisticated security codes than the current ones."Banks are ready and the company to print the Cheques has been identified,” Gatete said last week during the Financial Stability Committee meeting.The central bank figures on the country’s economic outlook also indicate that authorised loans as of September this year peaked at Rwf367 billion compared to Rwf339 billion approved last year.In the first three months of 2012, authorised loans went up to Rwf117 billion from Rwf 60.9billion at the same period last year.However, in the last quota, banks are trying to slow down and it’s expected that loan authorisation will slightly decline. "People have already formed expectations, but banks should not continue lending at this rate, its creating problems because loans to deposits ratio is 94 per cent slightly above the standard measure of 80 per cent,” Gatete said.He assured that the banking sector is stable, enough liquidity, capital ratio to an average of 24 per cent for banks only above 10 per cent required and 27 per cent for MFI’s.International standards liquidity situation is measured at 20 percent but the industry has an average of 40.2 per cent."This is good by any standard all the stress testing that we have conducted implies that we are protected, but still we are closely following what is happening globally,” he said. Non performing Loans also have significantly reduced in past years from 40 per cent in 2000 to 6.2 per cent by end September targeting to date 5 per cent.The decline in defaulting is attributed to establishment of Credit Reference Bureau with people careful on the importance of building their own credibility in borrowing.