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Business Process: Bank Cheque Clearing


Recently, I had to go through the implementation of a cheque clearing system; so, either because of the naive skull sticked on the top of my shoulders or the lack of documentation to find a clear business process, I was unable to understand it; let alone to tell the product users how things work.

And to my amuse, the business guys on the customer end were not sure about the inter-department business processes that happens with Inward/Outward processing of cheque. The guys with technology can only talk about the core banking stuff(for instance, how Phoenix web service would expose the data, or from which Mosaic view/table we can get/update what we want).

Fortunately (the absence of fortunate has been named unfortunate),  my friend google didn't provide me with anything useful that I could use/understand.

So with quite a bit of struggle, I was able to extract the following visual out of the discussions and research after a series of cross questioning the business departments (0:

Much appreciated by the customer, I thought of updating the visual to make it more generic, since the business process is the same for any bank around the globe, so that it would help at least someone who is looking for something similar having skull positioned as mine.



Inward/Outward Clearing
The cheques submitted to bank B, by the customer of bank A. The bank B would process those cheques as Outward clearing, and bank A is going to process those cheques as Inward Clearing. See step 2(Out clearing) and step 5(In clearing).

Returned Cheques
If any of the information provided by the cheque issuer mismatches the actual information of customer account, then the cheque is returned; returning from Inward would go as Inward Returns, and returned to Outward goes as Outward returns. See the alternate flows in the figure.

 Enjoy (0:

References:
1. IBDE - Interbank Data Exchange Format
2. iTRAN - http://www.ncr.com/
3. How bank work - http://www.howbankswork.com/

1 comment:

  1. Anonymous11 December

    Correction to your explaination above:

    Should be:

    The bank B (not Bank A) would process those cheques as Outward clearing, and bank A is going to process those cheques as Inward Clearing.

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