Speedy cheque clearance to benefit regional customers

Cheque imaging and truncation system from May 11

Channa KASTURISINGHE

CHEQUE CLEARANCE: The new Cheque Imaging and Truncation System which will come into effect from May 11 specially benefiting banking customers at regional level who find dealing with cheques a time consuming exercise.

The new image-based cheque clearing system will help minimise the need for banks to transport cheques physically for clearing and settlement from remote banks all the way to Colombo, Anura K.T. de Silva, Project Director of LankaClear (Pvt) Ltd., told the Daily News yesterday.

"Most importantly this will enable customers to realise their cheques on the following day from any branch," he said.

This new project with an investment of Rs. 600 million is implemented in Sri Lanka by LankaClear, (Pvt) Ltd., in association with the Central Bank of Sri Lanka and the Sri Lanka Bankers' Association.

De Silva said that although many developed countries have implemented cheque imaging and truncation systems, Sri Lanka is the first country to implement an imaging project on a national scale.

"The immediate benefit is the elimination of geographical imbalances for cheque clearing. It will benefit the entire banking sector by enabling timely reconciliation, verification and web based information.

LankaClear has set up 11 regional service centres across the island including areas such as Jaffna and Ampara minimising physical transportation of cheques.

These centres will be directly transmitted or forwarded via a CD-Rom the data from the cheques and image files for clearing. LankaClear will perform a bank wise sort and forward the sorted inward images and data to the respective paying bank.

The banks will be able to speedily decide whether to honour the cheques based on the electronic information," de Silva said.

He said that the cheque clearing process will be more streamlined if banks can have their own imaging equipment and directly connected to LankaClear.

"They will be able to lower operational costs while enhancing their operational efficiencies. Already four banks namely Commercial, Sampath, HNB and Seylan are planning to directly transmit images with LankaClear," de Silva said.

He said that the prerequisite for banking customers will be to use Image Friendly Cheques. "The most apparent transformation would be that a Cheque Return Notification (CRN) will be issued in lieu of a dishonoured cheque and the maximum re-presentment of a dishonoured cheque will be limited to once. Most importantly customers will be able to know the fate of their cheques the following day," de Silva said.

De Silva said that in Sri Lanka cheques to the value of Rs. 13 billion are processed daily. Out of these cheques over 10 percent of cheques are dishonoured. It sometimes take about 10 days for a customer, especially one from a remote town, to know whether his cheque is bounced or not," he said.

He also said that the CIT system will expand use of cheques and encourage participation of more outstation customers to engage in more economic activities.