Instant cheque clearance delayed

Getting instant credit for an outstation cheque deposited in your account sounds like a bit of a dream doesn’t it, especially since it takes anywhere between 7 to 15 days to get credit for out-of-station cheques right now. Well, had it not been for parliament getting dissolved, the idea would have become reality — the finance ministry had moved a bill that would have enabled electronic clearing of cheques. Hopefully, this bill will now get cleared in the next session.

How does electronic clearing take place? According to P.N. Mahadevan, whose company Purple Infotech Ltd has created a device to help the process, after you present your bank the outstation cheque, a scanned copy of this cheque will be transmitted (either through a leased line, or through a dial-up internet connection) to the central clearing house, and from there to the bank on whom the cheque is drawn. Once the signatures are matched, the clearing house will transmit acceptance immediately, ensuring your bank account is credited immediately.

Apart from ensuring immediate credit, the facility will also help reduce certain kinds of fraud taking place. Several fraudsters, for instance, get their banks to discount out-station cheques for them — then, after a period of a week or so, the bank finds out that the cheque has bounced, or is a fake cheque. Once there is on-line authentication, however, the risk of this will be reduced.