LankaClear, the operator of Sri Lanka’s National Payment Network - LankaPay,has made another stride in the payment and settlement arena by automating the cheque clearing cycle by introducing the online transfer mode of the Cheque Imaging and Truncation System (CITS).
With this revolutionary initiative, Sri Lanka made history by becoming the first in South Asia to launch the Online Transfer Mode of CITS, which replaced the current inefficient practice of transferring the last mile of cheque images via CD-ROMs.
This significant achievement is anticipated to further bring down human intervention and inefficiencies associated with the current cheque clearing process to a bare minimum, thus, allow the banks to further extend their service levels to their customers.
Operating under the supervision and guidance of the Central Bank, LankaClear launched the Cheque Imaging and Truncation System (CITS) in 2006, which transformed the domestic interbankcheque clearing process by eliminating the cumbersome physical presentation of the cheque, which saved significant amount of time and brought down the processing costssubstantially.
Although the introduction of CITS eliminated the inefficiencies associated with physical presentation of cheques, the banks still had to submit the MICR data of physical cheques saved onto CD-ROMs and deliver to LankaClear, daily.
This process was found to be ineffective due to numerous practical issues encountered in delivering the CD-ROMs before the assigned cut off timesand security vulnerabilities due to possibilities of the CD ROMs being damaged while transportation. .
With the launch of the Online Transfer Mode of CITS, banks are now able to transmit the MICR data of physical cheques via direct online transfer mode to LankaClear through a secured Virtual Private Network (VPN) with end to end encryption. This will be comparatively cost effective to the banks and will also eliminate the hassle of having to deliver the MICR data physically to LankaClear.
LankaClear Chairman Anil Amarasuriya said LankaClear’s progressive journey towards empowering the nation with efficient, cost effective, inclusive and secure payment infrastructure, leads the way as the country’s National Payment Network. Sri Lanka was also the first in South Asia to successfully rollout a sophisticated system like CITS in 2006. A decade down the line, the company has repeated this success once again by becoming the first South Asian Country to introduce the online transfer mode of CITS, taking a leap towards enhancing the efficiency and effectiveness of financial sector in the country.”
The new system went live on October 18 2016 with the participation of several member banks, namely Hatton National Bank, Commercial Bank, Cargills Bank, Standard Chartered Bank and NDB and subsequently the other banks would join the online mode. The end objective of introducing CITS online mode is to offer greater flexibility to banks’ customers,reduce the clearing cycle; and further enhance the security aspects of cheque clearing.
Add new comment