Question

Modern methods of clearing of cheque

Answer 1

Modern methods of clearing a cheque are:-
1. Cheque Truncation System CTS software clears the check very faster. They are basically used in RBI banks.
2. Regardless of whether cheques are cleared by the electronic images.
3. Modern- day banks have digitalized the cheque clearing process at the back end, while dealing with the central banks or other banks.
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Answer 2

HELLO FRIEND HERE IS YOUR ANSWER,,,,,,,,,


Let's take an example of a typical boy called "Smith". He uses a bank called Smith and Co. (fictional). He delivers and pays the cheque for a amount of $150 to a company called as RickyShewar Pvt. Ltd, who is banking with a bank called Rosie and Co. Now imagine, how's the RickyShewar's company's bank account is payed off by $150??

EXPLANATION :::::

Actually, first of all that cheque is delivered to the bank of Rosie and Co. further to a centralised clearing centre. This cheque is then processed by the given clearing centre via a passage of a reader or a machine or sorter machine. That machine then automatically reads the cheque given to it.

It reads the code line which is containing sort code, cheque number and account number and the amount of the cheque delivered.

These all cheques are then electronically sorted using the assigned sort codes that is, unique numbers or unique six digit numbers which are specially used to identify each of those bank and building society. It's then prepared for the exchange centre.

Provided data in the cheque is then read and converted into a specially made encrypted file which is known as Inter-Bank Data Exchange or IBDE files. Each and every provided IBDE is having digital signature which is signed so that to ensure that there's no misuse of data and any tampering of personal information.

Afterwards, the bank of Rosie and Co. gives the cheque to a particular exchange centre. This exchange centre with a given data then passes on this data in check to a paying bank, in this case it's the bank called "Smith and Co." which further delivers to its own clearing centre.

At the clearing centre of paying bank, that provided digital signature is thoroughly checked and then delivers and gives this to their own sorter machine or reader machine for ensuring the data given is correct and not tampered at all including the data should always match with the IBDE file. The cheque is sorted into a branch order or a sort code.

Further, the Smith and Co. Bank again thoroughly checks for viewing that Smith has enough money or the required money in his present account to cover the charges of the cheque, also it has to be checked that it's been correctly signed digitally, correctly dated and is written in a proper correct way and also if it's genuine enough. On that basis of information, Smith and Co. bank makes a decision whether to clear and pay off Smith's cheque to RickyShewar Pvt. Ltd. or to return it back as is totally unpaid back to Rosie and Co.

If Smith's bank makes a decision in order to not pay up, the cheque , to RickyShewar, his main bank will send back the unpaid cheque back to Rosie and Co. bank via a special courier.

This main decision to return a cheque completely unpaid must always be made in the morning of the daylight after the exchange so that cheque can be easily returned straight away back to Rosie and Co. of it's a necessary decision. That cheque maybe returned or delivered back unpaid for some reasons , like :

1) Customer did not have that much money in their current account to pay off the cheques directly.

2) The cheque is improperly signed or date is not correctly written or is not written correctly to authenticate and identify as a proper cheque.

3) Data is tampered and fraudulent for many reasons and data is malformed or not completely given. A scam or a fraud.

This whole given process is called especially as "Clearing cheque", which often takes a lot of days , approximately 3 working days to work on. So if the cheque is paid on Thursday , Wednesday or Friday this cheque will be taking a total of 5 working days to clear the cheque.

HOPE THIS HELPS YOU AND GIVES A DETAILED VERSION OF MODERN METHODS OF CLEARING THE CHEQUES !!!!!!