Clearing Department

Clearing means the transfer of funds within the same bank or to other banks. It is the part of the Remittances Department. Clearing is done for cross cheques only. Clearing can be done in following ways, Inward Clearing Outward Clearing

Inward Clearing:
When a customer comes who has his account in Bank Alfalah and he presents a cheque which is also of Bank Alfalah then transferring of funds in this case through cheque from one account to another is termed as inward clearing.

Outward Clearing:
When a person with his account in Bank Alfalah comes and presents a cheque of the bank other than Bank Alfalah then transferring of funds in this case through cheque from one account of the other bank to another account of Bank Alfalah is termed as outward clearing. Usually it takes 4-5 days for clearing a cheque.

Same day clearing:

Clearing of cheques which occurs in one day is called same day clearing. Presentation and clearing of cheques is carried out in the same day. But there is a condition under which a customer can use the facility of same day clearing and that is, cheque should be above than Rs.200,000 otherwise a person cant use the facility of same day clearing. The process of clearing is done in a clearing house of the State Bank. National Institutional Facilitator Technologies (NIFT) is used for this purpose. The NIFT employees come daily and take all the cheques from the bank for clearing purpose and deliver them to State Bank. In this way the process of clearing is done by The Bank Alfalah.

Installation of Bangladesh Automated Clearing House (BACH) is another remarkable event in the history of the financial sector in Bangladesh. It will simplify the remittance channel and payment system and, therefore, bring dynamism in business activities. The system was started in early November 2009 on experimental basis, participated by some well-prepared banks, and will be inaugurated formally soon. Applying sophisticated methods, the system needs only images and corresponding information of the submitted cheque leaves instead of a physical one, and will send them to the Bangladesh Automated Cheque Processing System (BACPS) using a secured communication link. New cheques/clearing instruments (standardised) will contain Magnetic Ink Character Recognition (MICR) line that encompasses information regarding the amount, transaction code, clients account details, routing number (numeric code assigned to bank branches for easy identification of origin and destination of the instrument), cheque leaf's serial number and so on. The system will support both intra-regional and inter-regional clearings based on a centralised processing centre in Dhaka and designated clearing regions, and will conform to the international best practices and cost-effective solutions for cheque processing.

Therefore, after getting customers' cheques for collection in the bank-branch, collecting banks will check the prima facie information of the submitted cheques, capture images and information, and send them to BACPS electronically. BACPS will then process and send the images and information to the paying banks for validation. Paying banks will examine the pertinent images and information, and send back to the BACPS for payment (further examination if any inconsistency like fund insufficiency or mismatch of signature etc.) Then BACPS will accumulate all the information, work out a single net amount for each bank, and send it back to the collecting banks. As such, the cheque clearing time is expected to be reduced to one day for countrywide payment. In other cases, this will be a matter of couple of hours only.

1. Customers will deposit cheques for collection in the bank-branch for collecting the amount of money stated on face of the cheque. 2. Collecting banks will check prima facie information of the submitted cheques, capture images and information of the cheques submitted for collection from different banks and send them to BACPS for processing. The paper cheques will be retained by the collecting banks. 3. Collecting banks will send the images and information to BACPS electronically. 4. BACPS will then process and sends the images and information to the paying banks for validation. 5. Paying banks will examine the pertinent images and information for validation. If the information is found OK, paying bank will send them back to the Clearing House for payment. If any inconsistency found (like signature mismatch, insufficient fund, etc.), paying banks will return them with specific reason(s). 6. At a specific cut-off time, BACPS will accumulate all the information, work out a single net amount for each bank, and send the return information to the collecting banks with net figure. 7. Collecting banks will process the return information and adjust the customer-accounts accordingly. These operations of BACPS using CIT technology will be secure, reliable and fast with no impact on the customers. At present it takes 2 to 3 days to clear a cheque and even more time in case of inter-regional clearing. Successful implementation of BACPS will bring down the clearing time to a single day country-wide. This will have result in faster transactions to foster overall trade and commerce all over the country having significant effect on the monetary management and economic growth.