BSP urges banks to adopt electronic check clearing system

Banks that are not yet in harmony with the Check Image Clearing System (CICS) must take the necessary measure to meet the technical requirements of one-day clearing of checks, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.

The electronic processing of checks is slated to commence and go live on Thursday, January 20.

"To achieve faster transition to the new process, the BSP enjoins the remaining non-CICS-compliant banks to take necessary measures to meet the technical requirements of CICS," the central bank said in an emailed statement.

Through the CICS, only the digital images of checks and the electronic payment information will be transmitted to the paying bank to shorten the turnaround time for funds to be credited.

"The implementation of CICS forms part of the reforms espoused by the Bangko Sentral to achieve a more efficient and safe payment system as this is critical to the promotion of the country's Financial Stability," the central bank said.

To be fully implemented on January 20, the shift was announced by BSP Governor Amando M. Tetangco Jr. and Philippine Clearing House Corp. (PCHC) Chairman Abraham T. Co in July last year.

The Philippine banking system is on track to fully migrate check clearing operations to an electronic system by the January 20 cutover date, PCHC President and CEO Emmanuel Barcena said.

“Banks have been preparing since early this year. They’re really trying their best to meet the BSP-set cutover date,” he said.

The BSP earlier clarified that while it has set a January 20, 2017 cut-off date, banks would still accept non-electronic checks for clearing but only until June 30, 2017

Depositors who transact with CIC-compliant banks may withdraw on the next banking day against their validated check deposits, according to the PCHC.

"Banks that are still on paper-based processing will continue to render the service under existing timelines," the BSP said.

"The public is likewise encouraged to get in touch with their banks about the new system and reminded on how to properly prepare checks under the CICS," it added. — Jon Viktor Cabuenas/VS, GMA News