Topics: Bank, Cheque, Credit card Pages: 5 (1503 words) Published: June 7, 2011
The word clearing has been derived from the word “clear” and is defined as:

Initially state bank of Pakistan provides the facility of clearing in its clearing house where representatives of all banks sit together and interchange their claims against each other. But now state bank of Pakistan has assigned this responsibility to National Institute of Facilitation Technologies (NIFT). It is one of the services provided by NIFT to other commercial banks. NIFT acts as a clearinghouse. Different banks are the members of the clearinghouse. A representative of each bank represents his bank in the clearinghouse. Each bank has collected cheques as behalf of their customer but these cheques are not drawn on their own bank so in the clearinghouse, they hand over these cheques to respective banks on which these cheques are drawn. Similarly each bank receives cheques from other banks if any. INSTRUMENT TO BE PRESENTED:

2.Demand Drafts
3.Pay Orders
There are four types of clearing:-
1. Inward Clearing
2. Outward Clearing
3. Intercity Clearing
4. Same Day Clearing
Those Cheques and other negotiable instruments which are drawn on Habib Bank Limited Mall branch Lahore, sent by other banks, constitutes the inward clearing of Habib Bank Limited. After having all the stamps and dates of cheques confirmed, the concerned drawer’s accounts are debited in Habib Bank Limited Mall Branch Lahore. 2. OUTWARD CLEARING:

When cheques and other negotiable instruments drawn upon other banks like City Bank, MCB, ABN-AMRO or Askari Bank of the same city (Lahore) are presented in Habib Bank Limited Mall Branch to deposit them in the respective payee’s accounts, these instruments are lodged in outward clearing of Habib Bank Limited Mall Branch. 3. INTER CITY CLEARING:

The cheques that are presented in inter city clearing are of another city and received by air. In this type of clearing the bank confirm at that time that the cheques are clear or not and give to the rider. 4. SAME DAY CLEARING:

The cheques that are presented in same day clearing are the local cheques and these cheques are clear in same day. Basically it is the benefit that is provided to customers. CLEARING PROCESS:
When the cheques are presented in Habib Bank Limited to be deposited in their respective payee’s accounts, different stamps are put on cheques before their lodgment in outward clearing. II. CROSSING THE CHEQUES:-

Crossing means two parallel lines, drawn across the face of the cheques with or without words written in between them. Crossing may be general or special. In clearing, cheques are crossed specially. Cheques are stamped with bank’s name between two parallel lines to constitute special crossing. After the cheques have been crossed specially, the holder cannot receive payment except through the banker named on the cheques crossing saves the instrument to go it in illegal hands. If, crossed cheques is lost or stolen, there is no risk involved. So it is an effective means of minimizing the risk of loss. III. CLEARING STAMP:-

After the cheques have been crossed specially, clearing stamp is put on the cheques and other instruments, with the next date, so these cheques would have to be presented in their concerned drawee banks on the subsequent day. IV. ENDORSEMENT STAMP:-

The word endorsement means anything written or printed on the back of an instrument. So endorsement stamp has to put with words “Payee’s account Credited in Habib Bank Limited, Lahore.” V. NATIONAL INSTITUTIONAL FACILITATION AUTHORITY:-

After putting these three stamps on cheques& other negotiable instruments, they are sent to NIFT. NIFT after segregating the cheques of different banks delivers them to their concerned banks. National Institutional Facilitation Technologies (Pvt.). Ltd. was incorporated in September 1995 as joint...
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