Speed Clearing is the system of collection of outstation cheques which had been drawn on an outstation (non-local) bank branch via local clearing for clearing purpose. This system facilitates the collection of cheques which are drawn on an outstation core-banking-enabled branches of banks, if they have net-worked branch locally. Earlier, the collection of outstation cheques required the movement of cheques from the Presentation centre (the place from where the cheques is presented) to the drawee centre (city where the cheque is payable). This increases the realisation time for cheques s the purpose of Speed Clearing is to reduce the time of realisation of outstation cheques. Although the process of cheque collection is faster in speed clearing process as compared to outstation cheque collection, it pre-supposes the drawee bank branch to be present in the location of the clearing house.
Earlier it took a time period of one week to three weeks which depended on the drawee centre and the collection arrangement for realisation of outstation cheques on the basis of collection.
How Speed Clearing Works
Core banking solution (CBS) are being implemented by banks through networking of their branches. In CBS environment the cheques can be paid by any location where the need of physical movement of cheques to the drawee bank is not required. The cheques drawn on an outstation CBS branch of a drawee bank can be processed in the local clearing under the Speed Clearing arrangement provided the drawee bank has a branch present in the local centre.
Time taken for clearance of cheques through Speed Clearing: The local cheques can be processed on the basis of T+1 working day and the customers avail the facility of withdrawal of the funds on the basis of T+1 or 2 days, where T denotes the day of the transaction (the day of the presentation of cheques at the clearing house). Thus the outstation cheques can also be paid on the basis of T+1 or2 days under Speed Clearing as any other local cheques.
Charges for clearance of cheques through Speed Clearing: At present banks do not charge any amount of money for clearance of cheques from the saving a/c customers for a value of up to and including an amount of Rs. 100,000.00. However the banks are free to charge any reasonable amount for a cheque of value more than rupees one lakh.
Instruments of all transaction codes (except Government cheques) and drawn on CBS enabled bank branches are eligible to be presented for Speed Clearing.
Speed Clearance an Advancement of Clearance System
On the basis of the outstation bank, the clearance system took around one week to three weeks in clearing the cheques. However, the speed clearance system reduces the time to just T + 1 to 2 days that is a maximum of 48 hours. Another advantage of Speed Clearance system is its economic rates. The drawee can withdraw his or her cheque free of any transaction charges under speed clearance while the clearance system incurs certain charges.
