BB to introduce automated clearing house from Aug 3

Siddique Islam | Published: March 01, 2009 00:00:00 | Updated: February 01, 2018 00:00:00

The central bank will introduce Bangladesh Automated Clearing House (BACH) from August 3 this year aiming to facilitate business activities through modernising the payment and settlement system.

Under the new system, payments will be settled using automated cheque clearing system and electronic fund transfer among 1050 bank branches in Dhaka initially, officials said.

The Bangladesh Bank (BB) also plans to extend such services to division and district levels in phases among 7000 bank branches by 2010 for smooth business transactions in the country, they added.

The bank has already issued a circular in this connection recently and asked chief executive officers of the commercial banks to follow the deadline for introduction of the modern payment system.

"Banks are required to make arrangements and develop infrastructure to meet the requirements of the new system," the BB said in its circular, adding that the central bank will adopt necessary regulations and issue operating rules and procedures in this regard.

"We're working to help the commercial banks adapt to the new system so that they can participate from August 3 this year," Executive Director of the BB Chowdhury Mohidul Hoque told the FE Saturday.

He also said the central bank has already asked the commercial banks to procure necessary software and hardware for establishing link between the bank concerned and the central bank.

The BB official also said such payment and settlement system will help build a Digital Bangladesh by 2021.

The BACH, the automated payment system platform, has two components -- Bangladesh Automated Cheque Processing Systems (BACPS) and Bangladesh Electronic Funds Transfer Network (BEFTN).

"We expect to introduce the BEFTN after implementing the BACPS in phases," Mr. Chowdhury said, adding that the central bank is going to issue a payment and settlement system regulation from all stakeholders shortly.

The present payment and settlement system in Bangladesh is not at par with the best international practices, which emphasises the need for safe and secured payment and settlement and the reduction of gap between payment and settlement, according to the BB's annual report for the fiscal 2007-08.

"Under the present clearing system, customers can use funds on t+2 or t+3. The collection of interregional cheques takes much longer time to clear," the annual report said.