Cheque and Credit Clearing Company

From Wikipedia, the free encyclopedia

The Cheque and Credit Clearing Company Limited is a membership-based industry body with 12 settlement members. The company manages the clearing system in Great Britain, which processes cheques, bankers' drafts, building society cheques, postal orders, warrants and government payable orders. Its wider remit includes the management of the systems for clearing paper bank giro credits and eurocheques.

The clearing system in Northern Ireland is operated under the Belfast Clearing Rules which are agreed by the Northern Ireland Bankers’ Association.

Members of the Cheque and Clearing Company are individually responsible for processing cheques drawn by or credited to the accounts of their customers. In addition, several hundred other institutions provide cheque facilities for their customers and obtain indirect access to the cheque clearing mechanisms by means of commercially negotiated agency arrangements with one of the full members.

The Cheque and Credit Clearing Company members, known as clearing banks are:—

Abbey National
Alliance & Leicester Commercial Bank, formerly National Girobank
The Governor and Company of the Bank of England
Bank of Scotland, also trading as Halifax
Barclays Bank
Clydesdale Bank, also trading as Yorkshire Bank
The Co-operative Bank
HSBC Bank, also trading as First Direct
Lloyds TSB Bank, also trading as Lloyds TSB Scotland
Nationwide Building Society
National Westminster Bank
Royal Bank of Scotland

Six and a half million cheques and credits pass through the British interbank clearing system each working day. Cheque volumes reached a peak in 1990 but usage has fallen since then, mainly owing to increased use of plastic cards and direct debits by personal customers. However, cheques remain popular in the business sector for paying suppliers.

Overall cheque volumes are expected to continue to fall from a level of 2.8 billion in 1999 to about 1.7 billion by 2009. The clearing operates on a three-working-day cycle.

[edit] 2-4-6 changes to cheque clearing

From the end of November 2007, changes known as 2-4-6 will come into force. These will increase clarity and certainty when paying in cheques to a bank or building society account.

The 2-4-6 changes set a maximum time limit of two, four and six working days for each of the stages after paying in a cheque to a current or basic bank account. The changes cover cheques, bankers' drafts, bankers' cheques and building society cheques paid in to sterling current and basic bank accounts. For deposit or savings accounts the maximum time limit for withdrawal is longer (6 days, rather than 4).

For the first time, after paying in a cheque, customers can be sure that at the end of six working days, the money is theirs. They are protected from any loss if the cheque subsequently bounces, unless they are a knowing party to a fraud. The changes also set maximum times when customers start earning interest on money paid in (2 days) and when it will be available for withdrawal.