BSP to amend checks clearing, settlement operations
The Bangko Sentral ng Pilipinas (BSP) wants to revise checks clearing and settlement operations to align with proposed changes to the peso-denominated real time gross settlement (RTGS) payment system.
The BSP in a draft circular circulated on Thursday, Nov. 3, said the current cut-off time of 4:30PM for the regular check clearing processing window will be be revised to 8.45AM. This will be handled by the BSP Financial Accounting Department (BSP-FAD) instead of the Philippine Clearing House Corp. (PCHC).
“The window for clearing items dishonored due to insufficiency of funds or credit, technical reasons, closed account and/or stop payment order shall be conducted in accordance with the timeline prescribed (for) returned items (while) the checks returned shall cause adjustments in the clearing results to be settled through the RTGS system,” the BSP explained.
The proposed 8:45AM cut-off time is revised to an activity of “sending of final statement of account (value Wednesday)” from “regular check clearing” window. Other revisions follow from the first start-time and cut-off time.
The draft circular amended or clarified about 60 activities with changes to parties or agency involved and their start-times and cut-off schedules. In addition, there are 12 activities for the upcoming new rules on RTGS intraday liquidity facility.
The BSP is giving all banks to submit feedback on the proposed schedules by Nov. 10.
The proposed guidelines covered check clearing operations for banks authorized to accept demand deposits where a “bank will not be allowed to incur overdraft arising from check clearing losses,” said the BSP.
For checks without sufficient funds or with stop payment orders, the BSP wants to revise cut-off clearing as well for dishonored checks and other cash items or COCI such as for local exchanges and for COCI not coursed through the clearing system.
The proposed amendments also included emergency loans or advances to banking institutions in terms of the following: acceptable collaterals and their corresponding loan values; and interest rates, liquidated damages and penalties.
The BSP said the “check clearing participants shall be given a period of three months from the effectivity of this circular to make appropriate changes to their plans, rules, policies, processes, and procedures in order to comply” with the requirements. “Upon the lapse of the said period, all existing Overdraft Credit Lines with the Bangko Sentral shall be terminated and the corresponding collaterals shall be released to the concerned banks,” it added.