Questions and Answers
What is one of the responsibilities of a Paying Bank according to the text?
Maintaining or using an Account with the Bangladesh Bank for settlement of items
In case of a failed inspection of original cheques within 7 calendar days, what consequence does it have according to the text?
Non-payment of the instrument
What action does a Paying Bank authorize the Bangladesh Bank to take according to the text?
Charge the amount of a payment item to the Paying Bank’s Settlement Account on the Settlement Date
What does indemnification entail in the context provided?
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What instruction should a bank take from a cheque issuer as per the text?
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What is essential for the reconciliation process mentioned in the text?
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In the Bangladesh Automated Clearing House, what is the Presentment Cut-off time for high-value transactions?
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What is a significant difference between manual clearing and automated clearing in Bangladesh?
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What is a feature of the Real Time Gross Settlement System (RTGS) in Bangladesh?
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Which statement accurately describes the responsibility of the presenting bank in the cheque processing system?
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What is a key requirement for cheque verification in the Bangladesh Automated Cheque Processing Systems?
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Which characteristic applies to the reconciliation process in the payment system context in Bangladesh?
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What are the participants involved in the Electronic Funds Transfer Network (EFT)?
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Which of the following is an example of EFT Credits according to the text?
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What is the purpose of Bangladesh Real Time Gross Settlement (BD-RTGS) system?
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During what time frame does Customer Transaction take place in RTGS according to the text?
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Which of the following is NOT an example of EFT Debits based on the text?
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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
