Faster Cheque Clearance System Faces Challenges

Mumbai, Oct 14 (PTI) A bank employee union on Tuesday claimed that the newer cheque clearing system introduced since October 4 for reducing the turnaround times is leading to "major challenges".

Software issues, coupled with a lack of adequate training for staff are leading to extended working hours and impacting customer service, the Maharashtra State Bank Employees Federation said in a letter to Reserve Bank Governor Sanjay Malhotra on Tuesday.

The National Payments Corporation of India (NPCI), which is tasked with running the image-based system that ensures same-day clearance of cheques, also admitted to the issues, saying there are some "teething issues".

From October 4, the central bank had initiated the new system which is designed to replace the batch-processing system under which it took up to two days to get a cheque cleared. Under the new system, banks are asked to send scanned images of the cheques deposited to the clearing house, which forwards the image to the drawee bank to swiftly credit the funds in the designated account.

Applauding the RBI's initiative, the bank union flagged some concerns.

"The new system appears to have been rolled out without sufficient operational preparedness," it said, adding bank staff are facing "major challenges".

Staffers have to deal with software issues and inadequate training, leading to extended work hours and also weekend shifts, the letter said.

"This is negatively impacting customer service, with instances of debited accounts not reflecting corresponding credits, causing confusion and dissatisfaction," the letter, which has been reviewed by PTI, said.

Banks are struggling with transaction reconciliation, it said, warning of a risk of financial losses.

Implementing the new system during the Diwali festivities, which witnesses heightened activity, is straining the system and the staff, it said.

The union sought RBI's intervention to streamline the process and also consider deferring the same-day cheque clearing to after the end of the festive season.

In a statement, the NPCI said while 1.49 crore instruments, amounting to Rs 8,49,557 crore, have been processed and cleared through the central system since October 4, there are some issues.

"During these initial days, we have encountered some teething issues both at the central system operated by NPCI and at the participating banks, resulting in delays in clearing and in crediting customers' accounts, and a large number of returns," the NPCI statement said.

It, however, added that most of the issues have been resolved and the central system has been "stable" since Monday, and added that the body is working with banks to address the remaining issues.