Sunday, June 3, 2012

MICR cheques in offing

Banks will have to issue Magnetic Ink Character Recognition (MICR) cheques from mid-April to clear their cheques electronically.
"The current system of electronic cheque clearing which started from April 9 is clearing normal cheques at present," said chief executive of Nepal Clearing House Neelesh Man Singh Pradhan. "After the standard cheques — Magnetic Ink Character Recognition — come into practice, there will be operational efficiency in banks and financial institutions," he added.
The standard cheques — that are different from the current cheques — will have a character recognition technology that will help facilitate the processing of cheques and will have the routing number and account number at the bottom of a cheque. The technology allows computers to read information like account numbers of printed documents. Unlike bar codes or similar technologies, however, MICR codes can be easily read by humans.
"The standard cheques will also have some security features that will help check fraud cheques," he said, adding that the current cheques have to be scanned and data needs to be punched manually to settle them electronically.
Nepal Clearing House started electronically clearing Nepali currency cheques from April 9, whereas it has been clearing foreign currency cheques from February 3.
Electronic cheque clearing provides means to electronically transfer cheque images through a secure medium completely replacing the traditional physical routine of moving paper-cheques among the banks and clearing house, which results in significant reduction of tedious and time consuming manual process of cheque clearing, both for banks and customers.
Currently, some 39 banks and financial institutions — including the central bank, 32 commercial banks, three development banks, and three finance companies — are the members of the clearing house that is settling the cheques electronically since the last couple of months.
The clearing house that was established in 2009, in association with Nepal Bankers’ Association, Nepal Rastra Bank (NRB) and other financial institutions has started Automatic Check Truncation and clearing systems with the current normal cheques.

CIAA clears NCHL
KATHMANDU: The Commission for Investigation of Abuse of Authority (CIAA) has cleared Nepal Clearing House (NCHL) from alleged corruption. The clearing house was blamed for purchasing expensive software from Progress Soft Corporation of Jordan. The anti-graft body had summoned the deputy governors to its office for clarification before giving its verdict. "We are cleared of all the charges against us," said chief executive of Nepal Clearing House Neelesh Pradhan.

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