Physical cheques to be replaced by an image cheque
The physical cheques will go from the banking system in the UAE on November 1, 2008, and the current automated cheque clearing system (ACCS) will be replaced by an image cheque clearing system (ICCS), according to a Central Bank circular.
After the success of the parallel running of ICCS along with the automated system between October 21, 2007 to January 31, 2008 within a group of banks, the Central Bank has decided to proceed with live operation of the system from July 1, 2008.
New system
The circular explains how the new system will function. Cheques deposited by bank customers will be scanned by branches of all banks and sent to their headquarters or regional offices (for foreign banks).
Each headquarter or regional office will then send all imaged cheques to the Central Bank. Banks that do not have a central system should authorise their branches to send imaged cheques directly to the ICCS.
Payment by banks will be made against their account holder's cheque images, provided sufficient funds are available and no discrepancies are noticed. Original cheques once imaged will be sorted within the premises of the bank concerned, and sent to the issuing banks within five days, directly from the presenting banks.
At the issuing banks, original cheques received will be verified for forgery and discrepancies and the issuing bank will have 30 days to claim against the presenting bank concerned.
The issuing bank must make its claim for good value of the cheque at the Central Bank, and the original cheque should be attached for the processing at the Central Bank.
The Central Bank has further clarified that the decision of the apex bank will be binding on both the issuing bank and presenting bank.
However, both parties will have the right to go for legal recourse if they desire so.
The high-value original cheques will have to be retrieved and submitted with the Central Bank or courts as and when they are demanded, within a period stated by the Central Bank.
The Central Bank will store cheque images through ICCS for a period of not less than 20 years and will be certified to the courts, if required.
After the success of the parallel running of ICCS along with the automated system between October 21, 2007 to January 31, 2008 within a group of banks, the Central Bank has decided to proceed with live operation of the system from July 1, 2008.
New system
The circular explains how the new system will function. Cheques deposited by bank customers will be scanned by branches of all banks and sent to their headquarters or regional offices (for foreign banks).
Each headquarter or regional office will then send all imaged cheques to the Central Bank. Banks that do not have a central system should authorise their branches to send imaged cheques directly to the ICCS.
Payment by banks will be made against their account holder's cheque images, provided sufficient funds are available and no discrepancies are noticed. Original cheques once imaged will be sorted within the premises of the bank concerned, and sent to the issuing banks within five days, directly from the presenting banks.
At the issuing banks, original cheques received will be verified for forgery and discrepancies and the issuing bank will have 30 days to claim against the presenting bank concerned.
The issuing bank must make its claim for good value of the cheque at the Central Bank, and the original cheque should be attached for the processing at the Central Bank.
The Central Bank has further clarified that the decision of the apex bank will be binding on both the issuing bank and presenting bank.
However, both parties will have the right to go for legal recourse if they desire so.
The high-value original cheques will have to be retrieved and submitted with the Central Bank or courts as and when they are demanded, within a period stated by the Central Bank.
The Central Bank will store cheque images through ICCS for a period of not less than 20 years and will be certified to the courts, if required.
/The Business Weekly/
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