Most of beginners who newly hired in banks always have a questions in their mind that what does Cheque Clearing Means?, What is the Cheque Clearing Process In Pakistan? How long does it takes? And How does the whole process Works?, Is there any limit of amount in Clearing?, What is Cross Cheque? So don't worry today through this article you will learn the basics regarding cheque clearing in Pakistan. In banking terminology Cheque Clearing is the process of payment settlement of cheque between two different banks, and the settlement is done through a third party who is actually transactional facilitator house named NIFT (National Institutional Facilitation Technologies Pvt Ltd), Keep one thing clear in mind that there is no any involvement of cash in clearing, Process of clearing is Highly Safe, Secure, Fast and reliable.
Role of Clearing in banking sector is very important and crucial, one can not think banking without clearing just because it facilitate you to transfer funds from one bank to other bank irrespective of amount, you may transfer 1Rs from your one bank account to other bank and you can also transfer 1billion on the same time, So there is no any limit of amount in clearing, But you need to present your cheque before 4PM, as the clearing timing is From 9AM to 4PM.
Lets talk about cheque clearing process works in Pakistan, Process of clearing starts when a customer visits the branch and present his/her own/party Cross cheque which means A/C Payee Only(A Cross Cheque can only be transfer from one account to other bank account) and ask you that I want to deposit this cheque into my bank account which is in your bank, you as a banker simply collect the instrument and start the scrutiny of the the instrument, i,e First you will cheque date, Cheque should not be post dated or stale in both cases you will not accept the instrument. Second most important thing while doing scrutiny is both word and figure should be match, Third thing which is most Signature of customer should be their on the face of cheque, Also there are soo many other factors that we should look while doing scrutiny, As you find the cheque (Instrument) is genuine and comply with banking SOPs, you will Process the instrument in your system and in the day end you send instrument to NIFT Office and on the next day bank will receive the amount against the instrument and bank will credit that amount to customer account.
Now lets understand the clearing process of cheques in Pakistan with example. Ali is the proprietor of M/s ABC, Ali is maintaining account in HBL Karachi main branch, Ali receive a cross cheque from one of his counterparty who is maintaining account in Al habib Karachi main branch, As Ali has bank A/C in HBL Bank he goes to his bank (HBL) and present the cheque of Al habib karachi main branch which he received from his counterparty, his branch(HBL) receive the cheque along with deposit slip, and post the instrument in system as per SOP's and Deposit Slip, and handover the carbon copy of deposit slip, and in day end branch send the instrument to NIFT, Next day morning NIFT will send cheque (Instrument) to concern bank branch for release/Process of payment and till evening HBL will receive the payment if there was no any discrepancy found in cheque by counterparty bank
Above one is the simplest example of clearing process, but it may be vary if type of clearing changes. I.e In Same day Clearing Settlement of funds will be done on same working day, In normal Clearing it takes one working day (T+1) time in normal clearing, In Intercity Clearing It takes around two working days (T+2) but it can take up to Five working days. We will learn all above types in next articles step by step, as these articles will help you in your daily banking, IBP exams specifically JAIBP Exams
