Check Clearing on the Same Day

One-Day Check Clearing for Local or Regional Checks. Will it happen soon? Will cheques soon clear on the same day it is presented to the bank?

It is expected, the BSP announced on its website. It announced that electronic check clearing will start on January 1, 2017. This means that checks will no longer be physically delivered to the paying bank. Instead, a digital image of the check will be sent online to the paying bank through the Check Image Clearing System of the PCHC*.

This is why the new design of checks is now like this:

3 changes:

1.  Smaller in size. Width now only 8 inches.
2.  The ₱ amount portion is now boxed.
3.  There’s a waiver — those words in small letters.
      The waiver says:
      I/We allow the electronic clearing of this check and hereby waive the presentation for payment of the original to XYZ Bank.

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Be reminded again that your check should have:
                . No erasure
                . No alteration
                . Complete information
                      Date
                      Name of payee
                      Amount in figures
                      Amount in words
                      Signature                  

What happens to the honored original physical check?
The original physical check will NOT be returned to the issuer or drawee bank. It will stay with the collecting or depository bank (where the check was deposited) for a period of 6 months. 
What happens now to a returned check or bounced check?  
The original physical check, with the reason for return stamped on it, will be returned to the payee by his/her bank. It also includes information on whether the check is good for re-clearing/redeposit or not.
Can the issuer ever see his honored original physical check again? 
Yes, but only within 6 months from clearing date. And most likely a not-cheap fee will be charged because both the depository bank and the collecting bank will be involved.
After 6 months, most likely the original physical check will be shredded, kasi sabi nila, after 6 months, only the digital image will be available for viewing upon request.

Not All Banks  
Sadly, there will be some banks that will not yet be able to participate in the Check Image Clearing System come January 2017.

*PCHC is the Philippine Clearing House Corp. (PCHC).  It will implement the electronic check clearing system through its Check Image Clearing System (CICS).
Glossary:
Payee — to whom the check was issued; person or organization being paid
Issuer — the one who issued and signed the check
or Drawer
Drawee bank — bank of the check issuer; bank with name embedded on the check
or Paying bank
Depository bank — bank of the payee; where the check was deposited
or Collecting bank 
or Presenting bank

Honored check — funded check; paid check; good check

Bounced check — not funded
Returned check

References: 

Bangko Sentral ng Pilipinas. 2016. Electronic Clearing of Checks to Start in January 2017. Retrieved from http://www.bsp.gov.ph/publications/media.asp?id=4172
Bank of the Philippine Islands. Check Image Clearing System. Retrieved from http://www.bpiexpressonline.com/p/1/907/check-design
BDO Unibank Inc. 2016. Check Image Clearing System. Retrieved from
http://www.bdo.com.ph/sites/default/files/notice_check_clearing.pdf
China Banking Corp. On Check Image Clearing System or CICS. 2016. Retrieved from 
http://www.chinabank.ph/pdf/CICS-FAQ-as-of-May-16-2016.pdf

20 Comments

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