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Questions and Answers
What is one of the responsibilities of a Paying Bank according to the text?
What is one of the responsibilities of a Paying Bank according to the text?
- Verifying the cheque leaf using a UV detector
- Maintaining or using an Account with the Bangladesh Bank for settlement of items (correct)
- Issuing Positive Pay Instructions to the cheque issuer
- Preserving original cheques for 10 years
In case of a failed inspection of original cheques within 7 calendar days, what consequence does it have according to the text?
In case of a failed inspection of original cheques within 7 calendar days, what consequence does it have according to the text?
- Disregard of the inspection requirement
- Extension of the inspection period
- Automatic credit to customer A/C
- Non-payment of the instrument (correct)
What action does a Paying Bank authorize the Bangladesh Bank to take according to the text?
What action does a Paying Bank authorize the Bangladesh Bank to take according to the text?
- Extend the deadline for returning an approved payment item
- Charge the amount of a payment item to the Paying Bank’s Settlement Account on the Settlement Date (correct)
- Request a material alteration of a payee name on a cheque
- Skip reconciliation process
What does indemnification entail in the context provided?
What does indemnification entail in the context provided?
What instruction should a bank take from a cheque issuer as per the text?
What instruction should a bank take from a cheque issuer as per the text?
What is essential for the reconciliation process mentioned in the text?
What is essential for the reconciliation process mentioned in the text?
In the Bangladesh Automated Clearing House, what is the Presentment Cut-off time for high-value transactions?
In the Bangladesh Automated Clearing House, what is the Presentment Cut-off time for high-value transactions?
What is a significant difference between manual clearing and automated clearing in Bangladesh?
What is a significant difference between manual clearing and automated clearing in Bangladesh?
What is a feature of the Real Time Gross Settlement System (RTGS) in Bangladesh?
What is a feature of the Real Time Gross Settlement System (RTGS) in Bangladesh?
Which statement accurately describes the responsibility of the presenting bank in the cheque processing system?
Which statement accurately describes the responsibility of the presenting bank in the cheque processing system?
What is a key requirement for cheque verification in the Bangladesh Automated Cheque Processing Systems?
What is a key requirement for cheque verification in the Bangladesh Automated Cheque Processing Systems?
Which characteristic applies to the reconciliation process in the payment system context in Bangladesh?
Which characteristic applies to the reconciliation process in the payment system context in Bangladesh?
What are the participants involved in the Electronic Funds Transfer Network (EFT)?
What are the participants involved in the Electronic Funds Transfer Network (EFT)?
Which of the following is an example of EFT Credits according to the text?
Which of the following is an example of EFT Credits according to the text?
What is the purpose of Bangladesh Real Time Gross Settlement (BD-RTGS) system?
What is the purpose of Bangladesh Real Time Gross Settlement (BD-RTGS) system?
During what time frame does Customer Transaction take place in RTGS according to the text?
During what time frame does Customer Transaction take place in RTGS according to the text?
Which of the following is NOT an example of EFT Debits based on the text?
Which of the following is NOT an example of EFT Debits based on the text?
How many online branches of scheduled banks were connected with the BD-RTGS system as of October 2021?
How many online branches of scheduled banks were connected with the BD-RTGS system as of October 2021?
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Study Notes
Payment Systems in Bangladesh
- Payment and settlement systems are the process by which funds are transferred among financial institutions, businesses, and individuals.
Types of Payment Systems
- Bangladesh Automated Clearing House (BACH)
- National Payment Switch Bangladesh (NPSB)
- Real Time Gross Settlement System (RTGS)
Bangladesh Automated Clearing House (BACH)
- Bangladesh Automated Cheque Processing Systems (BACPS) was started in October 2010
- It converts manual process to automated process
- High Value (BDT 5.00 lakh and above) presentment cut-off time: 11:30 AM, return cut-off time: 2:30 PM
- Regular Value (Less than 5.00 lakh) presentment cut-off time: 12:00 PM, return cut-off time: 4:00 PM
Comparison of Manual and Automated Clearing
- Manual Clearing: 45 clearing houses in the country, human required, time-consuming, huge collection cost from outside city
- Automated Clearing: only one clearing house, no human required, time reduced, collection cost is same as own city
Features of BACPS
- Genuineness of the cheque leaf, material alteration of payee name, amount or date, verification by UV detector
- Instruments, image, and data preserve for 6 years
- Original cheque available for inspection within 7 calendar days
- If failed, it will result in non-payment of the instrument
Responsibility of Paying Bank
- Comply with applicable BACPS rules
- Process the item in accordance with these rules
- Authorizes the Bangladesh Bank to charge the amount of a payment item to the Paying Bank's Settlement Account on the Settlement Date
- Indemnify the Bangladesh Bank to take any action for any loss or expense
Bangladesh Electronic Funds Transfer Network (BEFTN)
- EFT Transaction Flow: EFT Entries, A. EFT Credits, EFT Debits
- Participants involved: Originator, Originating Bank (OB), EFT Operator, Receiving Bank (RB), Receiver
EFT Credits
- Inward Foreign remittances
- Domestic remittances
- Payroll private and government
- Dividends/Interest/Refunds of IPO
- Business to business payments (B2B)
- Government tax payments
- Government vendor payments
- Customer-initiated transactions
EFT Debits
- Utility bill payments
- Equal Monthly Installments (EMI)
- Government tax payments
- Government license fees
- Insurance premium
- Mortgage payments
- Club/Association subscriptions
Bangladesh Real Time Gross Settlement (BD-RTGS)
- Introduced in October 2015 to facilitate real-time settlement of high-value and time-critical payments
- Over 10,810 online branches of scheduled banks are connected with BD-RTGS system as of October 2021
- RTGS Time Table: Customer Transaction Time: 10.00 AM to 3:30 PM, Inter Bank FT & Govt. Transaction: 3:30 PM to 4:30 PM, Return: 4:30 PM to 4:45 PM
RTGS Clearing Procedure
- RTGS Inward procedure
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