SPEED CLEARING :Speed clearing is introduced by the Reserve Bank of India (RBI) for immediate clearance of outstation cheques

at no cost. Speed Clearing refers to collection of outstation cheques(cheques that are drawn in non-local branches are called outstation cheques) through the local clearing. It facilitates collection of cheques drawn on outstation core-banking-enabled branches of banks, if they have a net-worked branch locally. . For instance, if a person living in Mumbai wants to send a cheque of Canara Bank to a branch of Canara bank in Gujarat, he can get the cheque cleared in just 48 hours through speed clearing. Earlier, the process used to take one to three weeks' time depending on the situation of branch in the area of receiver. Features of speed clearing
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One can get an outstation cheque cleared like a local cheque at the receiving branch Speed clearing doesn't involve physical movement of cheques from the source branch to the receiving branch Speed clearing facilitates cheque clearance in just two-three days as against the previous process that used to take more than 15 days

Advantages of speed clearing over local clearing Like speed clearing, the clearance of cheques is done through MICR system in local clearing but local clearing requires the involvement of clearing houses. The source bank needs to send the cheque to a clearing house. The clearing house first uses MICR technique and then sends the details to the receiving bank. The receiving bank credits the account of receiver as soon as it gets the details required for processing the cheque. The major disadvantage of local clearing over speed clearing is it requires the physical movement of cheque that takes time. Instruments processed through speed clearing
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Cheques with transaction codes 10, 11 and 13 Only MICR cheques are processed through speed clearing Only bank branches where core banking system is enabled can facilitate speed clearing Demand drafts can't be processed under speed clearing.

How to know if a cheque is cleared via speed clearing? Customers must ask for the CBS status of a branch. Many banks print CBS on the cheque leaves. The best way to know the CBS status of your branch is to count the number of digits of your bank account number. If the number of digits of an account number (which is printed on cheque) is more than 10, it indicates the cheque is from CBS-enabled bank branch. The customers can also check the website of RBI. List of speed clearing-enabled bank branches is given on the website.

But banks are permitted to charge Rs. if a person living in Delhi sends a cheque of HDFC bank in favour of someone living in Lucknow. The source bank sends the cheque to a clearing house. can be read by computers. The process that earlier used to take more than 15 days. Step 3: The magnetic characters provide important details i. now takes just two-three days. printed at the bottom of cheque. The movement of information takes very less time if compared to local clearing.150 for cheques of over 1 lakh rupees. The source branch sends the information to the receiving bank through core banking system. bank routing code and amount of the cheque required to process the cheque. Step 2: The source branch uses Magnetic Ink Character Recognition (MICR) system and sends details to the bank where that cheque is payable (receiving branch). depends on the location of reciever¶s bank. cheque number. This bank branch is called source branch. For instance. . the account number. MICR characters.e. however. The time. the Delhi branch of HDFC will use MICR technique and send the details to its branch in Lucknow. no fee will be charged.e.Process of SpeedClearing :Process of speed clearing consist of following steps :- Step 1: An individual deposits an outstation cheque with his bank branch. Step4: The receiving bank credits the account of receiver. Step 5: Receiver gets the amount free of cost i.

the Collecting branch presents it in local clearing to the Drawee branch or the Destination branch. is the process of Collection. On receipt of realisation advice of the cheque from the Collecting branch. This requires movement of cheques from the Presentation centre (city where the cheque is presented) to Drawee centre (city where the cheque is payable) which elongates the realisation time for cheques. Jaipur. in short. Bhopal.Why Speed Clearing ? As of now. On receipt of the cheque. In case of National Clearing. What is "Collection basis" ? A person who has an outstation cheque with him deposits it with his banks branch. Nagpur. it credits the customers account after realisation. The branch providing the collection service at the Destination centre is called Collecting branch. National Clearing is an arrangement under which the Clearing Houses managed by RBI provide inter-city cheque collection service to member banks of those Clearing Houses. It is called Presenting branch. it takes around a week to three weeks time to get outstation cheques realised through Collection basis. Once the cheque is paid the Collecting branch remits the proceeds to the Presenting branch. the Presenting branch will send the cheque directly to the Destination branch for payment. Ahmedabad. It is available at fifteen cities viz. How does the Local Cheque Clearing work ? In Local Cheque Clearing in 61 major centres. Patna and Thiruvananthapuram. When a cheque is taken on Collection basis by a bank. in the absence of a collection arrangement at the Destination centre. Bangalore. How long does it take for getting credit of an outstation cheque sent (i) on Collection basis and through (ii) National Clearing (Inter-city Clearing) ? Generally. Guwahati. Is National Clearing available in all cities ? No. Kolkata. the customers account is credited. . it takes around a week's time. This cheque is sent for collection to the city where it is payable / drawn called Destination centre or Drawee centre. Kanpur. using Magnetic Ink Character Recognition (MICR) technology. cheques are processed at the Clearing Houses on mechanical sorters. Alternatively. Mumbai. New Delhi. Hyderabad. This. Speed Clearing aims to reduce the time taken for realisation of outstation cheques. on Collection basis or through National Clearing (Inter-city Clearing). outstation cheques are paid through two channels viz. Bhubaneshwar. Chennai.

Cheques drawn on any location may be cleared as long as the branch is in CBS. National Clearing is restricted to cheques drawn on the specified locations. Speed Clearing facilitates the clearing of such cheques locally without the need to move the cheques to the Drawee centre. How is Speed Clearing an improvement over National Clearing ? In case of National Clearing the cheque is realised in around a week's time. It. As on date. 'T' denotes transaction day viz. the distance between the Clearing House and the participating branches is defined. the transfer of funds takes around a week to three weeks. How does the Speed Clearing work ? Banks have networked their branches by implementing Core Banking Solutions (CBS). In CBS environment. Generally. Bangalore 4. both the presenting and drawee branches should be within the jurisdiction of the Clearing House in Mumbai. National Clearing necessitates movement of the cheque to the Drawee centre. Under the Speed Clearing. Cheques drawn on outstation CBS branches of a Drawee bank can be processed in the Local Clearing under the Speed Clearing arrangement if the Drawee bank has a branch presence at the local centre. taking into account the local transportation and communication facilities as the cheques have to physically move to and from the Clearing House. cheques can be paid at any location obviating the need for their physical movement to the Drawee branch. Chennai 5. The concept Speed Clearing combines the advantages of MICR clearing with CBS. When will the beneficiary get funds under Speed Clearing ? Usually. within 48 hours. it would be realised on T+1 or 2 basis viz. depends on the location of the bank in the receiver's area.Erode 8. For example.Local Clearing handles only those cheques that are drawn on branches within the jurisdiction of the local Clearing House. the outstation cheques under Speed Clearing will also be paid on T+1 or 2 basis. Surat 3. date of presentation of cheque at the Clearing House. Mumbai 2.Vadodara 6. Which are the centres where Speed Clearing is presently available ? Speed Clearing is currently available in the following centres of our Bank: 1. Speed Clearing has no geographical limitation. for a cheque to be processed in Local Clearing in Mumbai.Trivandrum 7. So. however. the local cheques are processed on T+1 working day basis and customers get the benefit of withdrawal of funds on a T+1 or 2 basis.Trichy .

1.000/- Rs. Vishakapatnam 10. Rs.1. Kolkatta 13. Ahmedabad 17.to Rs.100 per instrument plus Service Tax as applicable.Coimbatore What about charges for cheques cleared through Speed Clearing ? Upto and inclusive of Rs.1.00.and above Rs.1 Lac Rs. Pune 11. Above Rs. Mangalore 12.Ernakulam Ludhiana 15.150 per instrument plus Service Tax as applicable .50 per instrument plus Service Tax as applicable.001 and above Rs.9.150/. What about the return charges for the cheques presented in Speed clearing? Upto Rs.00.000/.000/- Free Rs.per instrument plus service tax as applicable.Salem 14.001/.