WHO AM I?
I am a process that makes it possible to clear outstation cheques, locally, making the entire process quicker. The technology used for me is a combination of two existing provisions—the magnetic ink character recognition (MICR) code printed at the bottom of cheque leaves and core banking solutions (CBS), which is now being widely adopted by banks.
HOW HAVE I MADE A DIFFERENCE?
Earlier, if you got an outstation cheque, you would go and deposit it in your branch. The cheque would then travel to the collecting branch of the same city and finally to the bank branch of the other city from where it was issued (drawn). The drawee bank (from where the cheque was issued) then remits the money to the presenting bank (the bank where you submitted the cheque).
I have done away with this lengthy process that requires the cheque to travel physically. Through me, the cheque just travels to the designated local branch of the drawee bank and gets cleared by the bank’s core banking system (CBS) and the money is credited to the account of the presenter.
The time taken for clearing of outstation cheques has come down dramatically because of me. Earlier, outstation cheques would take about a week to get cleared; the process now takes about two days.
For banks, I bring benefits in the form of easy implementation, reduction in processing and other overhead costs, simpler logistics and improved fund management.
Currently, not all banks have implemented CBS. Similarly, not all branches of all banks have been linked to CBS yet. All cheques that are drawn on CBS-enabled branches are eligible to be presented for speed clearing. This means that the drawee bank should be CBS networked. A total of 51,285 bank branches in the country are currently participating in the speed clearing process, according to the Reserve Bank of India data as on 30 April 2011.
Demand drafts, money orders, dividend warrants and ITRO (income tax refund orders) cannot be cleared thorough me. High-value cheques and non-MICR cheques also cannot be cleared through me.