Electronic cheques must from new fiscal

KATHMANDU, APR 13:

The central bank has asked financial institutions to issue electronically readable cheques by the end of the current fiscal year.

Issuing a circular today, Nepal Rastra Bank (NRB) has directed financial institutions that avail electronic cheque clearance service from Nepal Clearing House Ltd (NCHL) to replace existing cheques with the standard cheques as specified in its Cheques Standards and Specifications Guidelines 2011 by mid-July 2013.

Standard cheques — that are different from the current cheques — have a character recognition technology that helps facilitate the processing of cheques and has the routing number and account number at the bottom.

The technology allows computers to read information like account numbers of printed documents. Unlike barcodes or similar technologies, Magnetic Ink Character Recognition (MICR) codes are easily readable. Standard cheques are supposed to have security features that will help check fraud cheques. The current cheques have to be scanned and data needs to be punched manually to settle them electronically.

Nepal Clearing House started electronically clearing Nepali currency cheques from April 9, 2012, whereas it has been clearing foreign currency cheques from February 3, 2012.

Electronic cheque clearing provides means to transfer cheque images electronically through a secure medium completely replacing the traditional physical routine of moving paper-cheques among banks and the clearing house, and results in significant reduction of tedious and time-consuming manual process of cheque clearing, for both banks and customers.

Currently, some 41 banks and financial institutions — including the central bank, all commercial banks and a few class ‘B’ and ‘C’ financial institutions — are members of NCHL that has been settling cheques electronically since the last couple of months.

NCHL, that was established in 2009 in association with Nepal Bankers’ Association, Nepal Rastra Bank and other financial institutions, has started Automatic Check Truncation and clearing systems with the current normal cheques.

Source: THT