Electronic cheques from mid-July

KATHMANDU, Feb 4

Central bank has postponed making electronically readable cheques mandatory for the second time.

Issuing a circular, Nepal Rastra Bank (NRB) has directed the financial institutions to issue electronically readable cheques by the end of current fiscal year. Back in October, NRB had directed the banks to circulate such machine-readable cheques by mid-January, 2014. Moreover, in April 2013, central bank had fixed mid-July, 2013 as the cut-off period.

However, the provision is only mandatory for the financial institutions that are availing electronic cheque clearance service from Nepal Clearing House Ltd (NCHL). To make the cheques compatible for electronic clearing, financial institutions have to issue cheques according to Cheques Standards and Specifications Guidelines 2011.

The central bank has been postponing the cut-off date since past one year due to financial institutions’ inability to replace the existing cheques with standard ones.

The standard 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.

Nepal Clearing House started electronically clearing Nepali currency cheques from April 2012. The clearing house, 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.

Source: THT