Electronic-Image Based Clearing
Electronic-Image Based Clearing System
Electronic-Image based clearing essentially requires conversion of physical cheque/financial instrument in an electronic form and the converted electronic form of document then moves forward as an authentic document for processing including fate decision making. This electronic form of document must be carrying image survival security features of a physical financial instrument hence mitigating/reducing fraud or forgery risks of a physical instrument along with reliable protection of a digital image and data so that its authenticity and non-repudiation can be ensure at all steps in the digital cheque clearing process. With the advent of Image based clearing, it is experienced globally where the same is implemented that it brings high level of efficiency and improvement in settlement cycles. NIFT has been working along with SBP and PBA member banks to prepare processes and guidelines regarding the Electronic Image Based Clearing. All stakeholders understand that it is now time to leapfrog into this direction and bring changes through technological innovation by replacing the old process of physical cheque/financial instrument movement and handling, by implementing Image Based Clearing.
Electronic-Image Based Clearing Solution
The complete clearing process is dependent on Collecting/Presenting banks, Drawee/Payee bank, Clearing House/NIFT and the Regulator/SBP. Hence, all parties should be ready to implement a workable solution, which would enable all banks to reap benefits of IBC as the ultimate beneficiary is the banks’ customers who will get the funds in their bank account by early settlement of financial transaction.
Processes envisioned for IBC are designed keeping in view the above requirements and critical feedback from the stake holders and the same is modified based on following key aspects:
Broadly, the IBC project will have two phases as follows:
1. In the first phase, NIFT invested in the technology and implemented the entire solution of Cheque capturing and scanning in its processing centers. NIFT will collect the financial instruments from Collecting/Presenting banks-branches (as is basis), process these instruments (capture/scan) in its processing centers however shall present Inward Clearing (instrument images and data) to Drawee/Payee banks electronically for fate decision.
The clearing process for the Drawee/Payee banks shall be through Image based so that the banks shall take fate decision on instruments images and data through NIFT Clearing Web Portal. After completion of clearing cycle, NIFT shall publish the Outward Returns to Collecting/Presenting banks through NIFT Clearing Web Portal as well as send auto emails to them. Physical instruments shall be delivered to banks as next working day (T+1). The banks shall adopt NIFT Clearing Web Portal to process and view the inward/outward clearing digitally.
2. In the second phase, physical movement of cheques/financial instruments would be truncated at Collecting/Presenting bank. Banks based on their readiness and with mutual agreements through NIFT, will perform cheque capturing/scanning at their branches/CPUs and truncate the physical movement of cheque/financial instruments. That cheque truncation will facilitate to launch express clearing cycles between the member banks to enable them to further speed up the clearing process. In order to facilitate the member banks, NIFT will offer end-to-end turnkey solution for cheque capturing/processing at bank-branch/CPU level.