SBP reduces cheque clearing time in wake of virus outbreak

KARACHI: The State Bank of Pakistan (SBP) has significantly reduced the time it takes to clear a cheque, according to a circular issued on Saturday.

According to Circular No.4 of the SBP’s Payment Systems Department, the payee or beneficiary can directly deposit a crossed cheque at the paying or drawee’s bank, rather than their own bank branches as per the existing practice.

This means that the SBP has omitted the beneficiary or payee’s bank from the cheque clearing equation. The payee can now provide their account details at the paying or drawee’s bank, and the funds would get transferred. In effect, that means the time it takes to clear a cheque should be significantly reduced, from the usual 48 hours to the same day.

The SBP has done this in order to limit person-to-person interactions, in the wake of the COVID-19 pandemic. To that end, banks can now also ask the clearing house, NIFT, to clear cheques through image based clearing, to minimize person-to-person interaction.

Article continues after this advertisement

According to the SBP, the funds may be transferred through various online fund transfer services. These include the MT102 of PRISM; the Over the Counter interbank fund transfer; or a bank’s internal online system if both the payer and payee use the same bank.

The paying or drawee bank has to ensure it authenticates and verifies their customers, through customer call bank, before debiting their customer’s account. The payee or beneficiary bank also needs to authenticate their customer’s credentials before crediting the customer account.

Banks are now also allowed to make arrangements from the doorsteps of their customer should they request it, using registered addresses.  Customers can also drop their cheques in selected branches’ drop boxes.

Priority and corporate customers can now send scanned images of cheques along with details of the beneficiary through registered emails to mobile apps to banks. The paying or drawee bank will have to authenticate, after which it can transfer funds to the beneficiary bank via the MT102 of PRISM.

The new steps are part of the SBP’s ongoing effort to speed up the digitization process of banks, and reduce person-to-person interactions during the pandemic.

The SBP had earlier on March 18 waived all fees or charges on online bank transfers. It reiterated this, along with the need for bank branches to stay open, on March 23.

At the time, it also asked banks to be mindful and vigilant of any increased cyber security risks, a point it again noted in this circular.

- Advertisement -
Meiryum Ali
Meiryum Ali
The author is a member of the staff and can be reached at [email protected]

1 COMMENT

Comments are closed.

- Advertisement -

Must Read

Biden’s chip dreams face reality check of supply chain complexity

SAN FRANCISCO: To understand President Joe Biden’s challenge in taming semiconductor shortage bedeviling automakers and other industries, consider a chip supplied by a U.S....