Mcb Clearing & Collection Process PDF

CLEARING, CHEQUES FOR COLLECTION & REMITTANCES CLEARING & COLLECTION  Clearing Clearing is a process of settlement (Collection and Payment) of banks payment instruments on behalf of customers with other banks ‘Collection’ and ‘Payment’ of i...

CLEARING, CHEQUES FOR COLLECTION & REMITTANCES CLEARING & COLLECTION  Clearing Clearing is a process of settlement (Collection and Payment) of banks payment instruments on behalf of customers with other banks ‘Collection’ and ‘Payment’ of instruments is known as Outward & Inward Clearing respectively. Classification of Collection Process Cheques drawn on same branch Cheques drawn on other branches of MCB / other banks, with in the area Clearing House Cheques drawn on outstation branches of MCB/other banks. Types of Instruments Collected  Cheque  Pay orders  Demand Drafts  Banker’s Cheque  SBP/NBP Cheque  Dividend Warrants  Call Deposit etc  Types of Clearing Inward Outward Clearing Inward Clearing Clearing means the Outward clearing cheques drawn means the on us, but cheques drawn on deposited with other branches of MCB / other other branches of banks’ branches MCB / other and sent to them banks’ branches by us for and presented collection of for collection of proceeds. proceeds. NIFT (National Institutional Facilitation Technology) A joint venture between a consortium of six major banks and the private sector Responsible for the establishment and management of automated clearing house facilities in Pakistan Actively involved in the modernization of payment systems in the country. All commercial banks in Pakistan are members of NIFT’s clearing system and SBP plays monitoring role on the clearing operations of NIFT NIFT (Objectives) To provide support to the financial industry in modernization of the payment systems in Pakistan. To facilitate automated solutions in the payment arena, (Utility Cos., Tax collection, Govt. receipts / payments etc, through cheques clearing NIFT Services ❑ NIFT is providing services commercial and microfinance banks of Pakistan ❑ Over 12,000 branches of 43 Commercial and microfinance banks are utilizing NIFT’s services through 27 processing centers. NIFT (Clearing House)  Frequency - Daily Call Back Confirmation Nature of Transaction Threshold limit for CBC Clearing Inward (Non-centralized Branches) ** PKR 500,000/- & above Clearing Inward (Centralized Branches with CPUs)** PKR 1.0 million & above Same Day Clearing PKR 500,000/- & above Internal/ Online Funds Transfer (By 3rd Party*)** PKR 500,000/- & above Instrument Issuance ((By 3rd Party, other than drawer of PKR 500,000/- & above the Cheque. The request should be signed by the Customer) Note:- CBC must also be performed for FCY transactions conducted by 3'd party customers. follow the threshold limits for CBC already defined after translating the FCY transactions amount into PKR. Cir NO: OPS-BPSPD/2022-58 Date: August 2, 2022 * Other than drawer of the cheque ** Only for RBG Customers  Deposit Slip Separate slip for local cheques drawn on our Branches and other banks. (to separately execute transfer and clearing entries Outstation cheques of different areas and banks should be enlisted on separate slips i.e. cheques for one city in one pay in slip.  Scrutiny of Deposit Slips Title and Account number is mentioned The amount on deposit slip tallies with that on the cheque both in words & figures Unauthorized alteration if any, is duly authenticated Sign and Contact number (Mandatory) of depositor mentioned (depositor, not account holder) Use of WHITO or any CHEMICAL is not allowed on the cheque All the required information is properly filled in.  Scrutiny of the Cheque During scrutiny following controls and instructions should be adhered. These instructions also contain the SBP’s instructions issued on Standardized Cheque Layout vide PSD Circular # 1 Dated 31-January- 2014 and PSD Circular # 2, Dated 15-July-2014 Particulars of the chq should be written with permanent & preferably blue or black Ink. The amount in words and figure is required and that too should match. Endorsement, if any, and special crossing are in order. Nothing on the chq indicates that the payee is not entitled to receive the amount. Cheque crossed as “Payee A/C. only” is not deposited in another customer’s account.  Scrutiny of the Cheque The amount, account and the title of account in the customer copy are same as in the bank’s copy of the deposit slip. Separate deposit slip will be filled by the customer, if he/she wants to deposit cheque and Cash. Cheque in the favor of firm ,Co. or institution should not be credited to account of partner, director, agent, manager or employee. Non transferable instruments should not be collected for a person other than the payee. Specimen Cheque – Old Stamping Practice Specimen Cheque – New Practice Specimen Cheque – New Practice (cont’d.)  Clearing Process (DAY 1) Receive deposit slip from the customer with instrument. Scrutinize the instrument & the deposit slip. Affix Special crossing stamp on the instrument Affix stamp on deposit slip and return the customer copy to the depositor. Endorse the instrument. Detach the instrument from deposit slips.  CLEARING PROCESS (DAY 1) Make an Ms Excel Sheet comprising account no, Title, Name of the drawee bank & branch, cheque no and amount. Make stack of 50 instrument. Make summary with bundle cover. Hand over the instruments to NIFT rider in a sealed bag. Place deposit slips in safe custody.  Clearing Process (Day Two) Take out the deposit slips from the Safe for further processing of the same in system. FLOAT Receive the returned instrument from NIFT and proceed the same in system. Branch is not allowed to post the difference batch in system, COSU(Centralization and Operations Support Unit (COSU) - COD will upload the return batch in CBS v8.5 through IT operations.  Same Day Clearing Only the designated Bank branches can entertain Inward & Outward Clearing Cheques. Amount: No Limit, Designated branches can submit cheque of any amount. (Circular No: OPS- BPSPD/2022-71) Both Receiving and Paying Banks/Branches should be members of "Same day clearing - NIFT“. Same Day Clearing Charges: As per SOBC. Clearing Cycle- Same Day NIFT Courier Activity Time Pickup/Delivery Timings (Monday – Friday) Outward Cheque Collection Timings 10:30am - 11:00am Processing of Inward Clearing in Bank's CPU (Through Image Base Clearing 01:00pm - 02:30pm (IBCS) along with defer for physical mode) Confirmation of fate through 03:00pm - 03:30pm emails/NIFT Portal Delivery of Physical outward returns to 04:00pm - 04:30pm Branches  Transaction Codes CQCC (Cheque Clearing BCBC (Banker’s cheque Buy Credit) Clearing) CQCD (Cheque Clearing ICCQ (Intercity Clearing Debit) for Inter City or Charges) Same Day CCBD (commission CQCR (Cheque Clearing Collection Bills Debit) Return) PSRM (Postages) CQRC (Cheque Return Charges) by CPU FEDC (FED Credit)  Accounting RB & GL Entries Credit entry of an Instrument. Debit Entry of an instrument. Inward/Outward clearing return entry. GL Entries.  Account Related Discrepancies Cheque drawn against Dormant, Inactive or Deceased accounts. Insufficient balance in the account. Cheque series not found/updated in the system. Account not found. Debit or Credit turnover limit exceeds. Account Related Discrepancies Stop Payment marked against the cheque. Amount exceeding RF limit. Restraint marked: officer not authorized for the transaction. CNIC not updated, new CNIC copy required. Limit Blocked by CRC (with specific reason) Stop Withdrawal by Bank  Instrument Related Discrepancies Drawer’s Signature Differ. Operating instructions required. Signature not tagged with the account. Cheques drawn on Photo Account. Call back confirmation required: Transaction amount of PKR 1 Million and above or 009 cheque ? Cheque identified as maleficent for any reason by NIFT is 009 cheque… Stop payment marked against the cheque  Other Cases All Call Deposit Receipts - CDRs issued by branches. Speed Cash, Remit Express Drafts. Foreign DDs drawn on Global Transaction Banking Branch. Un-signed/singly signed bank drafts. Revalidation required: stale dated bank drafts.  Cheque Return Memo Cheque Return Memo (SF-16) is used for informing the beneficiary of the cheque, if it is returned unpaid & it has the following distinctive features: It has a field available for mentioning Account and cheque Number It has space available to mention the amount of cheque. It has a field available to mention the ‘Name of the collecting Bank’ to whom branches will return the cheque. It has space to mention the “return reason” (should be as per approved return reason list by SBP )  ABC Bank Ltd. Day Month Year XYZ Branch, Lahore (0123) 21 04 2014 Cheque No…returned unpaid for reason marked 1. Amount in words and figures differs 2. Insufficient funds in Drawer’s Account 3. Unclaimed deposit - funds transferred to SBP. 4. Date is missing 5. Duplicate Instrument/Instrument lodged again in Clearing 6. Fake Instrument. 7. Forged/Tempered Instrument. 8. Incomplete Instrument/Required details are missing 9. Not Drawn on us. 10. Stale Instrument. ABC Bank Ltd. Day Month Year XYZ Branch, Lahore (0123) 21 04 2014 11. Payment instrument contains extraneous matters/ conditional statements 12. Post-Dated Instrument. 13. Suspicious instrument. 14. Closed/Inactive Account. 15. Dormant Account. 16. Blocked/frozen Account. 17. Non-resident account, Form A-7 required. 18. Bank’s Special Crossing required. 19. Clearing stamp required. 20. Stamp date is invalid. 21. Payment stopped by drawer ABC Bank Ltd. Day Month Year XYZ Branch, Lahore (0123) 21 04 2014 22. Payment stopped by drawer 23. Payment stopped on order of legal/court or any law enforcement agency 24. Payment cannot be processed due to force majeure event 25. Alteration on payment instrument requires drawer’s signature 26. Signature is forged 27. Signature is missing 28. Signature is unauthorized 29. Incomplete endorsement 30. Forged endorsement 31. Collecting Bank’s endorsement/discharge unsigned / irregular / illegible  Cheque Return Formalities Noting details of Returned Cheque sent in Outward Clearing, in the Cheque Return register SB-15. Informs the customer about the returned cheque via SMS/email/ letter etc. and notes down the appropriate remarks on the reverse of return memo. On customer’s visit to the branch, the original instrument is delivered along with Chq return memo after taking acknowledgement on SB-15 against the respective entry. If customer does not come to collect the Return Cheque from the branch within 03 working days he/she is intimated by sending SF-20 along with copy of Returned Cheque and Return Memo.  Intercity Clearing If an instrument is drawn on intercity/ NIFT Handling bank branches Schedule Bundle cover Stamp Entry in Intercity register Separate Envelope for Each City. INTERCITY CLEARING Inter City Clearing Inter City Clearing  Cheque Collection Non- Centralized Branches If an instrument is drawn on intercity/ remote area bank branches ▪ Affix Bank’s Crossing Stamp on all instruments. ▪ Affix CC Stamp. ▪ Endorse the instrument. ▪ Ensure that payee has written his/ her name and IBAN /account number on rear/ back side of the payment instrument. ▪ Affix bank’s clearing stamp, sign-off and return customer copy (B) of the deposit slip to the depositor.  Cheque Collection Non- Centralized Branches Collecting Branch Formalities Enter particulars in SB-19 Cheque Collection Register in Serial Number Mention Serial Number in CC Stamp with Prefix Number of the year of Bank’s Establishment On day end pass liability vouchers Debit Bills Receivable Bills Collection Credit Bills Collection Bills Receivable XYZ Bank Limited ABC Branch (0123) Lahore CC…………… Manager  Cheque Collection Non- Centralized Branches Collecting Branch Formalities Prepare Collection Schedule on SF-37 Send Collection Schedule(SF-37) with the crossed instrument to Collection Cell Branch /Drawee Branch Through Courier Service By Registered Post if Courier Service Unavailable Time limit to collect the proceeds 72 Hours from the date of deposit of Cheque. Place SF-37 with deposit slip in a separate CC Outstanding File  Cheque Collection Non- Centralized Branches Drawee Branch Formalities Complete Dak Received Formalities Designated Officer scrutinize the Covering Schedule and segregate the cheques and POs/ DDs/ CDRs/BCs for scrutiny and further process Affix ICC Stamp on Instrument and Covering Schedule Enter Particular of Cheques in ICC Register SB-70 in serial order Note Serial Number in ICC Stamp on both the instrument and SF-37  Cheque Collection Non- Centralized Branches Drawee Branch Formalities Call Back Confirmation, if required. Posting by Designated Officer in CBS/ SSO as per the nature of the instrument(s) Validation by Supervisor/ BOM if required Prepare SF-179 Credit Advice. Apply Tests on Credit Advice. Note date of Payment/Return in ICC register and on SF-37. Dispatch Credit Advices or returned instrument thorough courier or registered post. Collecting Branch Formalities upon Receiving the Funds TEST check. Recover Charges if Cheque Received from branches of other banks & Remit the proceeds Reverse Liability Return Unpaid Cheques with objection memo after entering in SB-15 cheque return register as discussed earlier  FBC - Local Bank’s FCY Cheque Deposited in MCB FCY Account In case of FCY Account Holder deposits FCY Account Cheque of any other Local Bank. NIFT provides USD Clearing facility to all the Local and Foreign Banks within Pakistan on Monday and Thursday Branch received FCY chq from the customer and forwards the same to Main Branch for collection of funds. Main branch lodges the cheque in NIFT USD clearing, on clearance of the same NIFT provide advice to Main Branch in USD who send SF 179 to the respective branch and report the same to treasury back office through Annexure A & Annexure B. Branch Upon receipt on SF 179, credit the customer’s account  Outward Foreign Bills for Collection (Outside Pakistan) Prepare Collection Schedule (Check 21 for USD) &(SF-37A) in triplicate and send to the foreign correspondent bank Foreign correspondent bank receive cheque and on clearance of funds credit bank’s Nostro account MCB COD forwards the swift message or intimation for receipt of credit in Nostro account to the concerned branch Branch after verification prepares annexure and after completing all formalities forwards the same to treasury back office before the cut-off time for processing at their end.  Inward Foreign Bills For Collection (NIFT USD Clearing Facility) Main Branch received the instrument from NIFT on specified days and dispatches the same to the concerned branches the same day Branch scrutinizes the cheque in every aspect of completeness and accuracy provide the fate to Main Branch through email by preparing the SF 179 in equivalent PKR from the rate sheet & if the instrument is not cleared, it is returned along with the chq return memo Main Branch on receipt of SF 179 from the branch reports the same to treasury back office through annexure. Returned/ un-cleared cheques (once received from branches) are delivered to NIFT on very next USD Local clearing day for onward delivery to the collecting bank. Swift Message (MT-202)  FCY Cheque (of Other MCB Branch) Deposited in MCB PKR Account Collecting Branch after scrutiny the chq collection stamp is affixed and it is noted down in FCC (SB-70) register, prepare covering schedule and attach the same with the instrument and forwards the same to drawee bank. Drawer’s Branch debit customer’s foreign currency account and prepare SF-179 in PKR by applying FCY buying rate from rate sheet and test. Collecting branch verify AS Sign and test and credit the customer account.  Local Bank’s FCY Cheque Deposited in MCB PKR Account Collecting Branch after scrutiny the chq collection stamp is affixed and it is noted down in FCC (SB-70) register, prepare covering schedule and attach the same with the instrument and forwards the same to drawee bank and post liability voucher. On receipt of PO from the Drawee Bank, lodge the instrument in Normal Clearing in order to transfer funds in the beneficiary’ account. Collecting Bank recovers its charges from the proceeds of the cheque, note down the payment date in the Foreign Bills for Collection Register.