IMPORTANT ADVISORY ON CHECK CLEARING
Here's a quick guide to help you manage your checks (or check issuances) as the Philippine Clearing House Corporation (PCHC) moves towards the full implementation of the Check Image Clearing System (CICS) targeted within the year 2016.
1. What is the new Check Image Clearing System (or CICS)?
CICS is the new automated clearing system that will be adopted and implemented by Philippine Clearing House Corporation (PCHC). It will be the facility for clearing Deposited Checks among Banks using image and electronic payment information.
2. Why the shift to CICS?
CICS is proven effective and is accepted globally as more and more countries have adopted the process. Denmark and Belgium were the pioneers, having started in the 1980s. Other countries such as New Zealand, Australia, USA, Singapore, Spain, Hong Kong, Malaysia and other countries followed suit.
3. What are the benefits of CICS to bank customers?
The primary objective of CICS is to shorten the clearing cycle to make funds available on the next banking day instead of the traditional 3 to 5 banking days. However, this may not be enjoyed immediately upon implementation, awaiting further announcement from PCHC.
4. Are there new guidelines issued to banking customers due to the CICS?
- New Check Design
- Standardized length of checks to 8 inches for both Corporate (Commercial) and Individual Checks
- A waiver that states “I/We allow the electronic clearing of this check and hereby waive the presentation for payment of this original to (Drawee Bank)”.
- Embedded security features
- Checks with alteration/s or erasure/s are no longer acceptable for clearing even if with counter-signature. The same also applies to checks with missing relevant information such as date, payee, amount in figures, amount in words, signature.
5. What will happen to the old design Checks?
The old / non-CICS checks will no longer be accepted starting July 1, 2017, except for Post-dated Checks that are warehoused by banks up to December 31, 2016.
6. Can the Check Depositor still get the original check in case it is dishonored?
Yes, the original dishonored check shall be returned to its depositor by the Presenting Bank.
7. What will happen to the Paid/Honored Checks?
Paid/Honored Checks will no longer be given back to the Drawer/Issuer. The physical items will be kept by the Presenting/Collecting Bank for 180 days from Payment Date.
The monthly statement of account sent to the Drawer/Issuer will only include the image reproduction of the negotiated checks.
PCHC Circular Memo 15-460
PCHC Circular Memo 3093
PCHC Circular Memo 3126