New Check Clearing & Settlement Procedures Today

If you’re a holder of a checking account with any legitimate banking institution then you should be aware that the Bangko Sentral ng Pilipinas will be imposing the new Clearing and Settlement Procedures as embodied by Circular No. 681 dated February 8, 2010.  This becomes effective today, January 24, 2011 for checks under the Manila clearing system – which most of our checks are actually included.  It basically puts an end to illegal KITING activities.  Wikipedia defines Check kiting as “intentionally writing a check for a value greater than the account balance from an account in one bank, then writing a check from another account in another bank, also with non-sufficient funds, with the second check serving to cover the non-existent funds from the first account.” Here’s an excerpt from the said Circular:

Thus effective today, if your checking account has insufficient balance vis-a-vis the checks you have issued, you won’t have the chance to deposit for the insufficient balance anymore.  For example, once the clearing system “reads” your check has insufficient funds, it is IMMEDIATELY returned as DAIF (Drawn Against Insufficient Funds) at 7:30 a.m. the next day.  The same thing happens if the check is drawn agains CLOSED or non-existing account.  This would mean imposition of charges on your account, embarrassment on your part and a possible criminal case filed against you. The BSP hopes to curtail illegal activities related to issuances of checks with this new procedures.  Check this out…

Checks Clearing & Settlement Procedures

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