What is clearing?
Clearing is the process of inter bank fund collection by using Bank instruments through some systematic procedures with the involvement of the Central Bank(Bangladesh Bank).
What is BACH?
Bangladesh Automated Clearing House (BACH) is a computer network-based clearing and settlement system to exchange of electronic bank instruments among the Participating Bank.
Payment System implementation history at a glance:
- Manual Clearing process started from 1972.
- Semi-Automated Clearing house-NIKASH-1997.
- Bangladesh Automated Cheque Processing Systems (BACPS) initiated in September-2010.
- Bangladesh Electronic Fund Transfer Network (BEFTN) initiated in February-2011.
- National Payment Switch Bangladesh (NPSB), in operation since 2012.
- Real Time Gross Settlement System (RTGS) introduced in October 2015.
Read Also: How to register for e-GP? E tendering process in Bangladesh.
Types of clearing instruments:
The following MICR encoded payment instruments are eligible for clearing in accordance with Bangladesh Bank guidelines:
1. Savings Bank Account.
2. Pay Order.
3. Current Account Cheque
4. Government Cheque
5. Cash Credit Account Cheque
6. Credit Card Cheque
7. Dividend Warrant
8. Foreign Taka Demand Draft
9. Demand Draft
10. Foreign Currency Cheque
11. Refund warrant
12. Foreign Currency Demand Draft
Types of Clearing Session
1. High Value Session (Tk. 5,00,000/- to above amount can be placed as High Value)
2. Regular Value Session (Any amount can be placed as Regular Value)
Settlement Time
Clearing Window | Presentment | Return | Settlement |
High Value (HV) | 12:00 | 15:00 | 15:01 |
Regular Value (RV) | 12:30 | 17:00 | 17:01 |
Presentment Types of Clearing Instrument
1. High Value First Presentment
2. High Value Second Presentment
3. High Value Third Presentment
4. Regular Value First Presentment
5. Regular Value Second Presentment
6. Regular Value Third Presentment
Types of Clearing Process
1. Outward Processing
2. Inward Processing
Outward Processing by Branch
The presenting Bank should examine the cheque’s image and other electronic information from the inward cheque envelope sent by the Presenting Bank and shall verify the following information:
1. Instrument must check through UV detector whether the instrument is genuine or not. It helps to prevent instrument based fraud forgery.
2. The drawer bank, branch
3. Name of drawer
4. Payee’s name must be present
5. Valid date (must not be stale or post-dated
6. Amounts in words and figures match
7. MICR Code line must be present
8. Alterations are counter-signed
9. Crossings are present
10. The drawer’s signature in the electronic scanned copy should be identical to the authorized signature at the bank.
Branch Activity Before Scan
 |
| Front side of a cheque |
 |
| Back view of a cheque |
1. Crossing
2. Clearing Stamp
3. Endorsement
4. Batch Control Voucher
Rules for Creating BACH Clearing Voucher (BCV)
1. Fill up at least two BCV for each Batch (One for Clearing House and One for Branch).
2. At first fill up a Batch Number with the format “yyyy/mm/dd- sequence number”.
3. Then enter the Ledger date and Branch name.
4. No. of cheques should be fill up with special care and with the Total Amount, total number of chques within a batch should not exceed 50.
5. Fill up branch routing number and depositor’s name.
6. Clearing type should be normal and high value and for different clearing type batch must be different.
7. Presentment should be 1, 2, or 3 and for different presentment type batch must be different.
8. Depositor must sign during depositing the cheque and receiver must count the cheque and sign in BCV during receive the cheque.
9. Sender delivers one copy of BCV to the receiver and take another signed copy of BCV to the branch.
10. Cheque should be sent to the clearing house on due time.
Truncation PointActivity
 |
| General Truncation practice in BD |
1. Scan
2. Data Entry
3. Checking
Bank has to perform these Bangladesh Automated Clearing House (BACH) activities by three operators:
01. Scan Man
a) Creates a batch with BCV data
b) Scans cheques for that batch
c) Ensures no. of cheques matches with BCV
d) Ensures MICR was extracted correctly
02. Data Entry Operator
a) Opens one batch at a time
b) Enter cheque amount, depositors account no.
c) Ensures batch total and count matches
03. Outward Checker
a) Opens a batch
b) Ensures all data entered are correct
c) Sends to central admin for Participating Bank Module (PBM) or
d) If found any mismatch Return to data entry operator to fix.
Central Admin Activity
1. Complete all sending and receiving between PBM and CPS (Cheque Processing System)?
2. Continuously monitor PBM and CPS for activities ready to receive or send.
3. Receive reports from Bangladesh Bank and match with the CPS and PBM generated reports.
4. If any discrepancy occurs then try to solve the problem.
5. Manage user activities and day end process.
Return of Bangladesh Automated Clearing House(BACH) Instruments:
Bangladesh Bank identifies some specific reasons for return of a Inward clearing instruments
Sl. No. | Reason of Return (Mention in the Core Banking System) | RE-PRESENTABLE (YES/NO)
|
01. | Insufficient fund | YES |
02. | Amount in figure and word differs | NO |
03. | Stale Cheque | NO |
04. | Post Dated Cheque/Undated Cheque | YES |
05. | Drawers signature differs/Missing | NO |
06. | Payment stopped by Drawer | NO |
07. | Item represented too often/More than 03 times | NO |
08. | Incomplete or missing endorsement | YES |
09. | Forged endorsement | NO |
10. | Material alteration-Payee name/Amount/Date/Account Number | NO |
11. | Forged or unauthorized signature | NO |
12. | Missing Corporate Stamp | YES |
13. | Incorrect Amount/Cheque Number/ Account Number | NO |
14. | Item sent to the wrong bank/branch | YES |
15. | Account Closed/Dormant/Blocked | NO |
16. | Advice not received | YES |
17. | Duplicate Item-Previously Paid | NO |
18. | Incorrect Payee (Mismatch with advice) | NO |
19. | High value item presented to an ineligible branch | NO |
20. | Cheque not Activated/Intimation not received | YES |
21. | Cheque and Advice Data Mismatch | YES |
22. | 07 (seven) Days Notice Required | YES |
23. | Test key required/differs | YES |
24. | Not Arranged for/Credit Limit Exceed | YES |
25. | Revenue Stamp Required/Not Sufficient | YES |
26. | Signature and Seal Required on the Stamp | YES |
27. | Budget Required/ Refer to the Issuer | YES |
28. | Item Required Re-validation | YES |
29. | MICR Data and Image Mismatch | YES |
Charges for Bangladesh Automated Clearing House (BACH):
1. No charge applicable Up to Tk. 50,000/-
2. For Above 50,000/- to 4,99,999/- Tk. 10/-including VAT (BACH charges Tk. 8/- +Bank Charges Tk. 2/-).
3. At Tk. 5,00,000/- & Above, the bank will charge Tk. 25/- including VAT (BACH Charges 20/- + Bank charges Tk. 5/-) in the case of Regular clearing.
4. In case of Same Day/High value Clearing has to pay Tk. 60/-including VAT (BACH Tk. 50/- + Bank charges Tk. 10/-) for Tk. 5,00,000/- & Above.
FAQs:
01. What does Clearing mean in banking?
Clearing means the settlement of fund collection from one bank to another bank through a systematic way with the involvement of Bangladesh Bank.
02. How many days is normally required for the clearing of Cheque?
Normally two to three days are needed for clearing of cheques. But sometimes for high value cheques, it is possible to clear within a day if the presenter of the cheque is able to present the cheque within presentment time.
03. What is high value clearing?
From Tk. 5,00,000/- to above amount are practiced as high value for clearing. But its customer choice is whether it is placed as high value or not.
04. What is the Cheque clearing time?
Generally, Bangladesh bank fixed the time for clearing as last time for High value placement 12.00 PM, for return 03.00 PM, and settlement time after 03.00 PM. And for regular value, 12.30 PM, for return 05.00 PM and settlement time after 05.00 PM.
Good work brother. Keep updating.
How to dishonor other bank cheque? How much have to pay for cheque dishonor?
Usually bank charge 200/- along with 15% vat.
Thanks sir. It will be helpful for us.