2. Clearing House Techniques & Operations

3. Before Liberation WarAfter Liberation War The State Bank of Pakistan which was the central bank of the country had a branch in East Pakistan, which was called “Dhaka Branch” Reorganized the Dhaka branch of the State Bank of Pakistan and named it Bangladesh Bank Reorganization was done by Bangladesh Bank Order 1972

4. Where all scheduled bank gathered and perform online transection that means taking & giving money through the help of Bangladesh Bank clearing house. Bangladesh Bank act as a medium between many banks Without the help of Bangladesh Bank no banks could not perform this type of any transections. If branch of Bangladesh Bank is not available then Sonali Bank will perform that funtion on behalf of Bangladesh Bank.

5. Tha first modern bank clearing house was was established in London in 1773. In United States the first clearing house was founded by New Yourk City’s commercial banks in 1853 By the late 19 th century, check clearing house had been established across the United States.

6. 1.To take economic policy. 2.Quick settlement of transaction. 3.To save time. 4.To accelerate the advantages of transaction. 5.Influences on the cash deposit of bank. 6.Assistance in realizing economic condition. 7.Helpful in transfer of money. 8.To supervise the clearing works of the banks from time to time.

7. Automated Cheque Processing System Using Cheque Imaging & Truncation Technology (CIT) BACP participants - commercial banks, financial institutions, money & capital market agencies and related Government office Communicati ons Link Magnetic Ink Character Recognition (MICR)

8. Point of Truncation Submission of selected branches list Cheque image submission for proper truncation No of point of truncation

9. Scanning Standard Black & White Color 200 – 300 DPI DPI Range TIFF Format CCITT G4 Compression Back Side: Same as Front side of the image

10. Software Integration Capability if sending files and data Out Clearing Facility Capability of In Clearing system Gateway software module – Participating Bank Module (PBM)

11. Communication Link BACH Headquarter BACH Disaster Recovery Site (DRS) Mode of operation and daily volume Size And Scalability

12. Electronic Fund Transfer System Bangladesh Electronic Fund Transfer Network (BEFTN) Credit Transactions ->> Debit Transactions Connecting EFT operators via communication link

13. Presentment 12:00 Hrs Return 17:00 Hrs Settlement 17:01 Hrs RegularClearing

14. Presentment 11:00 Hrs Return 13:00 Hrs Settlement 13:01 Hrs High Value Clearing

15. Manual Paper-based same-day settlement of large-value payments of large-value payments Foreign exchange clearing system provided by BB Manual cheque clearing system in the (DAD) of BB Maximum large value payments can’t exceed 2000 Process through clearing house and (DAD) of BB

16. The inter-bank check clearing system Interbank checks are cleared by BB Check Clearing House Physical exchange of cheques are manual and paper based Retail & customer large value cheques of participants are settled by maintained accounts with BB Clearing House

17. Continued…..….. Cheque clearing is decentralized Instruments – Cheques, Drafts & Pay-orders are cleared through BB Clearing House Cheques are cleared through Head Office, State owned Sonali Bank & BB branches….

19. 3 2 1 Chittagong Rajshahi Sylhet B B Branches 6 5 4 Khulna Barisal Bogra 7 Rangpur 8 Sadarghat 9 Motijheel

20. Implementation of BACH  BACH’s centralized automated system will reduce settlement and operational risk  First Phase – Manual, Paper based clearing ->> Automated Clearing  Second Phase - Offer clearing of electronic credit and direct debit instruments  Promoting modern payment instruments

21. Advantage of Clearing House Reliable decrease in operating costReliable decrease in operating cost Reduce, even eliminate, postage and express delivery chargesReduce, even eliminate, postage and express delivery charges Reduced Costs Email notification when we receive your claims and begin processingEmail notification when we receive your claims and begin processing Claims are validated and transmitted to payer prior to their daily cut-off pointsClaims are validated and transmitted to payer prior to their daily cut-off points Immediate Confirmation

22. Electronic process allows you to no longer file and track paper claimsElectronic process allows you to no longer file and track paper claims Audit and payer reports eliminate worryAudit and payer reports eliminate worry Streamlined Process Up-to-date payer specific audit systemUp-to-date payer specific audit system Notification of rejected claims within minutes rather than weeksNotification of rejected claims within minutes rather than weeks Increased Productivity Continued…..….. Claim lifecycle is drastically reduced Claim lifecycle is drastically reduced Eliminate the time wasted on mail float Eliminate the time wasted on mail float Faster Reimbursement

23. Disadvantage of Clearing House Free software provided may not be accepted by all your trading partners Provided software requires training and additional time for a learning curve. Limited by the standard EDI templates of the Clearing House Dependant on data entry services of Clearing House, for Paper to Fax submissions

24. Continued…..….. Claimed information sometimes must be entered a second time to use carrier-supplied software Claims are edited and validated to insure they are error free. This is done manually and requires an Additional Point of Entry Risk management may be increased

25. Recommendations….. Legal framework and payments oversight need to be strengthened Settlement of large value payment should be enhanced Settlement risks in large-value payments need to be reduced

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