Cheque please!

The long awaited digital cheque clearing process instigated by the UAE's Central Bank is a requirement all UAE banks must fulfill. Compliance is usually a dirty word in IT circles, so Brid-Aine Conway looks at whether the new system will benefit businesses along with customers and how it was implemented.

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By  Brid-Aine Conway Published  November 3, 2007

Legally required IT projects usually make the business world tremble. They normally signal the beginning of a project with high costs and very little return on investment for the companies involved while the intended beneficiaries are often the customers or the general public, rather than the companies or organisations involved.

When it comes to the UAE Central Bank's requirement that cheque clearing processes move to a digital imaging system, the benefits for the customer are clear. With the prior manual process, the physical cheque was deposited in a bank, went through the bank's clearing process and was then sent to the Central Bank for its clearing process. All of that could take anything from three to seven days, or even two weeks for particular types of cheque, depending on whether the cheque was cashed at the issuing bank or not.

The vast amount of benefit that will come, both for the banks and the customers, is from the time that will be saved in the clearing process.

Once the new Image Cheque Clearing System (ICCS) for cheques in the UAE is fully up and running, the aim is that a cheque can be deposited at any bank at eight in the morning and the funds will become available to the depositor that same day. Aside from the convenience of such a system, it also means that the customer will not be losing three to seven days of interest that could be earned on those funds.

However, while the customer benefits are clear, most of the banks involved in this project see benefits to the bank also. Santosh Babu, head of IT at Al Masraf (formerly ARBIFT) bank, based in Abu Dhabi sees a clear return on investment for his bank.

"As an initiative provided by Central Bank, the vast amount of benefit that will come, both for the banks and the customers, will come from the time that will be saved in the clearing process," he says. "The customer will get his money really fast and the bank saves money in terms of the manual work involved in sending people to the clearing section at Central Bank, that work will all be eliminated."

Michael Mathew, IT manager at Commercial Bank of Dubai, agrees: "There will be a considerable reduction in the staff because the physical cheques need not come to the clearing centre and from there you don't need a person to go to Central Bank for its clearing. That's one of the main advantages as far as RoI is concerned. There is also an advantage in better customer service because in future, the customer will be getting the credit from their cheques from another branch on the same day."

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