clearing
DESCRIPTION
TRANSCRIPT
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CLEARING
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Clearing:
mutual settlement of claimsamong member banksagreed time and placeAs per instruments drawn
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Clearing HouseThe place were member banks agree to meet, through
their representativesnet amount payable or receivable is settled through an
account kept with the controlling bankSBI – State Bank of India
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Clearing can be classified as
Counter clearingNon – MICRMagnetic Ink Character RecognitionCheque Truncation System
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Counter ClearingKnown as manual clearingDirectly sent to banks through courier or through
bank officials.Out-datedCo-operative Banks
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Non – MICR
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MICRMagnetic ink character recognition is a character
recognition technology used in the process of clearing the instruments.
MICR encoding is at the bottom of an instrument which includes bank code bank account number cheque number amount with secret code.
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Clearing:InwardInward ReturnOutward Outward Return
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Inward When a particular branch receives instruments, which
are on themselves and sent by other member bank for collection is treated as Inward Clearing of that branch.
This branch is known as paying branch
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Inward ReturnsWhich are presented by collecting bank to other
banks for payment but it has been returned and unpaid by them due to specified reason through the clearing house.
System generated return memos
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OutwardWhen a particular branch receives instruments drawn
on the other bank within the clearing zone and sends those instruments for collection through the clearing arrangement is considered as Outward Clearing for that particular branch.
This branch is known as collecting branch.
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Outward ReturnsInstruments which are return by paying bank due to specified
reason through the clearing house.
System generated memos will be attached
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PROCESS
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Statement from clearing houseFavour Adverse
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CTSCheque Truncation System (CTS) is a cheque
clearing system undertaken by the Reserve Bank of India (RBI) for faster clearing of cheques.
Same format for all banksSize
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PROCESS
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Thank You