MICR cheque leaf: A revolution or a retribution?
Thursday, 8 April 2010
Maswood Alam Khan
IN 2008, I asked my friend who works in Maryland, USA, why he didn't have to issue cheques for payments. He answered: "I seldom issue cheques. I gave only three cheques in two years for paying dues, though I also had options to make the same payments electronically. It's a fun to write a cheque when you are bored with electronic banking. Nowadays fund transfer to anybody is just a click of a mouse or a soft touch on the keyboard of a phone. With ATM card, internet banking, and phone-banking easily usable the use of cheques is going out of fashion in America".
I felt excited reading a piece of news in a local daily that within this month anybody can transfer money through any post office in Bangladesh at a nominal charge. What the post offices need for such electronic fund transfers are laptops equipped with software. The sender of money will convey to the receiver a secret number called Personal Identification Number (PIN). The receiver will walk to the post office, present his national identity card, mention the PIN he got from the sender and take cash in a matter of seconds or minutes.
With such electronic fund transfers made so easy in Bangladesh I was wondering the day perhaps is not far away when writing a cheque will be a fun for us too, like in America, to make payments to our friends, relations and the creditors.
In Bangladesh most people don't have any bank account though a great number of people have mobile phones. So, thanks to a huge network of wireless connectivity already in place, there is in our country a great potential for electronic banking, which is way cheaper and safer than paper-based banking as to hardware and software costs.
However, Bangladesh Bank would like to retain and improve the existing paper-based banking instruments. As such with a view to improving the country's payment system it has undertaken a programme called 'Bangladesh Automated Clearing House' as a part of US$ 46.13 million - project called 'Central Bank Strengthening Project, which is in operation since 2003. Of the total cost of the project the World Bank approved US$ 37 million and the rest US$ 9.13 million is supposed to be borne by the government of Bangladesh.
There are two views about whether Bangladesh for mass people's benefits should go direct to electronic banking phasing out paper-based banking or improve traditional paper-based banking and gradually embrace electronic banking.
There is a saying that one should climb each and every step of a ladder before reaching the top of a structure. There is also another saying that in this competitive world one cannot afford to waste time in climbing a ladder. One has either to jump or to be lifted onto the top of a structure by a substitute of a conventional ladder. The substitute may be a special spring boot that catapults you or a lift that pulls you onto the roof of a structure in no time.
Rural people in Bangladesh were not used to conventional land phones before they started buying mobile phones. So, an advice to climb up all the steps may sound like an advice to buy a manual type-writing machine first to get used to typing before touching a computer.
For the last few years Bangladesh Bank has been working to modernise the country's payment system with funds borrowed from International Development Association (IDA), the soft-loan window of the World Bank and the UK's Department for International Development (DFID) under the 'Central Bank Strengthening Project' (CBS Project). To automate the functions of payment system through the clearing houses under the control of Bangladesh Bank, a programme was launched in the name of Bangladesh Automated Clearing House (BACH) with two components: one is Bangladesh Automated Cheque Processing System (BACPS) and the other Bangladesh Electronic Funds Transfer Network (BEFTN). Bangladesh Bank decided to implement the BACPS first and then BEFTN.
Before understanding the idea of processing paper-based cheques by their images through an automated clearing system, we should know what is the 'clearing house' and how many of bank clients will be benefited by such automation process. We should also know whether the present system of clearing process is defective and direly needs automation, whether there is a cheaper alternative for increasing the efficiency of payment system and most importantly what is the cost the poor Bangladeshi people will have to defray for such modernity.
A clearing house meant for inter-bank payments is an office where banks exchange instruments and settle accounts. Now for a client in Dhaka city it takes not more than one day in between his submitting a clearing cheque and getting payment. That means if you present a clearing cheque to your bank today you will find your account credited in the morning of day after tomorrow. The whole process is done manually. Much less than one per cent of clients of banks located in cities issue account payee cheques that need to be routed through a clearing house. Most of the account payee instruments are government-issued cheques and banks-issued drafts and pay orders. On an average, not more than 3000 instruments including cheques are cleared everyday through the clearing house located at Dhaka office.
It is expected that when electronic fund transfer would gain ground against paper-based fund transfer the use of paper instruments will become unpopular the way letters, telegrams and money transfer through post offices have become extremely unpopular with mobile phones becoming very trendy---a scenario that is not a good news for those local and international giants who are still supplying required raw materials and machineries for paper-based banking instruments.
There may be some confusion about reliability, utility and efficacy of electronic way of transferring funds. Some may think they could always have concrete evidence in black and white if a payment is done through a cheque. Yes, it was so when electronic banking was not available.
I should say electronic transactions are rather more reliable than transactions through paper instruments. There is always an authenticated evidence of electronic transactions in the hard copies (in paper) generated by service providers against each and every electronic transaction. Cheques are dependent on a client's signature which varies and often invites complications while electronic transactions are dependent on PIN which is secure for both the bankers and their clients as there is less probability of cheating or getting cheated.
The only area, some may wrongly think, where cheques could be of importance is when a creditor needs a cheque, against products or services sold on credit. Under the present law if a cheque given by a debtor bounces, the creditor shows the bounced cheque to claim debts in a court of law. In electronic banking, too, a similar encoded promissory note may easily be made to be given which would be effective on a specific future date. If the encoded promissory note does not work on the specified date or later for receiving fund an automatically generated hard copy may be used as an evidence of breach of promise that can well be presented to a court of law for claims.
One may raise question as to why Bangladesh Bank had decided to implement BACPS, before BEFTN. Had BEFTN been implemented before BACPS the bankers would not have encountered the difficulties they are now facing. If electronic fund transfers between individuals and companies were encouraged and facilitated through a central server based in the central bank under their BEFTN programme we could find the use of cheques diminishing so greatly that it would perhaps have obviated the very need of BACPS and thereby could save millions of dollars on account of improving paper-based instruments. Implementation of BEFTN, which is more dependent on software, would have been many times cheaper than BACPS which is more hardware hungry.
However, with a view to implementing automated cheque processing system as a part of their BACH programme Bangladesh Bank directed all the banks to follow a set of specifications to standardise their cheque leafs which would be known as MICR (Magnetic Ink Character Recognition) cheques and make sure that all the account holders of all the bank branches in Dhaka city are given MICR cheques and not to send any conventional cheque (non-MICR cheque) to Dhaka Clearing House from April 01, 2010. In their latest circular the central bank has directed that all banks now have to pay Tk 100 in processing fees for every non-MICR cheque at the clearinghouse of its headquarters.
Since April 01, 2010, most of the bank branches in Dhaka city have miserably been failing to abide by the instructions of the central bank as to handling MICR cheques. The bankers and their clients are confused what to do in a situation when replacements of old cheque leafs by new MICR cheque leafs for all their account holders could not be possible and when hundreds of cheques, which were earlier issued, were all in non-MICR cheques. It was impossible to supply personalised cheque leafs to thousands of account holders.
The government cheques, drafts, pay orders, foreign drafts, treasury chalaans and many other instruments are yet to be standardised as MICR instruments. A gigantic MICR printing machine bought by Bangladesh Bank's Security Printing Corporation (Bangladesh) Limited (SPCBL) at Gazipur is not working well, especially when the machine has to run on a standby generator due to frequent power outage from the national grid. Government cheques with MICR features which could well be printed by SPCBL alone are now being printed partly by Bangladesh Security Printing Press (BSPP) at Tejgaon for the base sections and partly by SPCBL for the MICR sections, resulting in substandard printing quality.
The pandemonium that has been broken out in banks due to introduction of MICR cheques raises many questions in people's mind as to efficacy and benefits of the new system of payment.
As a client of a state-owned bank and also as a retired banker, I myself was baffled by some of the weird rules of the new system, especially the logic behind compulsory issuance of MICR cheque books to all the account holders, irrespective of their needs and types of accounts. Ninety-nine per cent of the account holders of banks in Bangladesh always use cheque leafs for cash over the counter and seldom issue any crossed cheques meant for a clearing house. A payment system like MICR cheques meant to serve less than one per cent of account holders should not be imposed for all and sundry to subscribe to. Could not it be made optional for bank clients, who want quicker service of clearing house, to subscribe to the new system or to buy a few MICR leafs as and when necessary, in addition to their conventional cheque leafs?
The new catchword MICR as something chic sounds enigmatic to many of us. A statement that the introduction of a Magnetic Ink Character Recognition (MICR) line on all cheques provides the mechanism for capturing cheque information electronically for providing the foundation for automated processing may enamour someone naïve, but is grossly a misleading idea as I have come to learn after my discussions with a number of IT experts at home and abroad.
MICR concept was a revolution in the early sixties when eyes of machines were too feeble even to read numeric characters, let alone texts. With number of clearing instruments mounting astronomically, to an extent of millions a day in the clearing houses, bankers in the sixties were desperately searching for a machine that could read numbers and automatically sort out the piled instruments inside the clearing houses in busy cities like New York and London. Powders of magnet laced with printing ink worked like a magical solution when such magnetic ink was used to print the numeric characters on the cheque leafs to prod the feeble eyes of the machines and accentuate their reading and sorting capability, ushering in a new ground-breaking name 'MICR banking instrument' that came with tamper-proof and high security special character schema. Many developed and developing countries, except Bangladesh, have since been using MICR instruments for ages for error-free sorting and swapping of instruments in clearing houses.
But time has changed and the golden era of MICR is already over. Now, for a poor country like Bangladesh who never used MICR cheques and the related machines it is foolishness not to adopt methods and machines that are way smarter and cheaper than those of MICR.
From what I could read in Bangladesh Payment and Settlement Systems Regulations, 2009 (BPSSR 2009), where there was not a single mention of the word MICR, it is evident that the authority concerned is also well aware of the fact that though MICR played a pivotal role in the automatic cheque clearing houses golden days of MICR are coming to an end, thanks to bionic eyes and Herculean capability of modern scanning and sorting machines to read, translate and sort any character and codes -- magnetic or non-magnetic or whatever. What is now modern is 'Image Truncation Technology' and BPSSR 2009 has rightly highlighted the aspects of "Cheque Truncation and Electronic Cheque Image Presentment".
One may now wonder why then all these hooplas about MICR cheques are in this age of 'Image Truncation Technology'. Unless MICR prints are already there in the old stocks, there is no need for printing any portion of a cheque newly in MICR because today's image truncation technology no more needs characters to be printed in magnetic ink. Bangladesh Bank in their instruction letters has rightly directed all the concerned banks to print their cheque leafs to be compatible with image truncation methodology. But surprisingly it has also given a contradictory instruction to print the leafs with an MICR line as well in the area meant for cheque serial number, routing number, account number and transaction code, etc. The confusing instruction, frankly speaking, sounds like advising one to write a letter 20 per cent by a manual type-writing machine and the rest 80 per cent by a computer.
There is perhaps a serious lapse in the whole process of automation of the clearing house and electronic banking that are being practiced in Bangladesh. The new electronic systems have not yet been placed before the law makers. A citizen cannot be advised to participate in any service of public interest or in any new system, especially when it relates to financial interests, unless a law clearly defining the rights of the beneficiaries of the service and the obligations of the service providers is enacted by the parliament and published in the government gazettes. Plus, millions of shareholders of bank companies have their right to know what benefits the newly adopted system would bring for the interest of the general public and for the profit of the shareholders.
As far as my knowledge goes there has not been, till today, any amendment made to Negotiable Instrument Act (N.I. Act) as to 'electronic fund transfer' or to other aspects of modern banking like 'the use of images of Cheques' etc. It is a matter of great surprise how the country's monetary watchdog, in the absence of such an amendment to N.I. Act, allowed or dictated the commercial banks to offer services as to modern e-banking like electronic fund transfer through ATM machines and mobile phones and settlements of payments through images of special cheques, so-called MICR cheques.
A regulation approved by our central bank is not a law and hence under no circumstances should be binding on a vital public interest on the negotiability of electronic banking instruments.
If today a bank client is cheated by someone or if a deceitful client frauds a bank in any electronic banking transactions the aggrieved entity, unless the N.I Act is amended as to such electronic transactions, will not find a relief in any court of law and, I am afraid, the expenditure the commercial banks have now been incurring in installing all the electronic gadgets for e-banking may be deemed unlawful and may not be overlooked by statutory audit authorities and the banks' shareholders in the future.
It was reported, that some banks had hurriedly purchase security papers, electronic gadgets and services at higher than normal price for replacing all the normal cheques by MICR cheques for all the clients of all the branches of all the banks that are members of Clearing Houses---no matter all the clients would be benefited or not.
One wonders what will happen if our parliamentarians after weighing the pros and cons of MICR cheques decide not to approve of an amendment to N. I. Act in this regard. MICR cheques, the law makers may think, would be of benefit to only a handful of bank clients, not of any benefit to the multitude of the poor and the general clients!
Nowadays while foisting any shoddy goods or services upon gullible clients the easiest method of cheating people of a developing country like Bangladesh or Cambodia or Nigeria is to refer to unfathomable science and blurt out some incomprehensible scientific jargons. The cheating becomes much easier if somehow any so-called expert from the development country can be made available to explain in his unintelligible accent the eerie science of information technology, for example, to a high-ranking banker who never did touch the mouse of a computer.
International business entrepreneurs who are unable to survive in the neck breaking competition in the West are of late crowding our markets with a view to implementing their shrewd ideas, some of course well, but mostly bad propositions. In most cases, some vested quarters are now busy selling obsolescent products and services, not salable in the developed countries, in the name of digitisation now that they know we are all a little obsessed with anything digital.
The writer can be reached at e-mail : maswood@hotmail.com
IN 2008, I asked my friend who works in Maryland, USA, why he didn't have to issue cheques for payments. He answered: "I seldom issue cheques. I gave only three cheques in two years for paying dues, though I also had options to make the same payments electronically. It's a fun to write a cheque when you are bored with electronic banking. Nowadays fund transfer to anybody is just a click of a mouse or a soft touch on the keyboard of a phone. With ATM card, internet banking, and phone-banking easily usable the use of cheques is going out of fashion in America".
I felt excited reading a piece of news in a local daily that within this month anybody can transfer money through any post office in Bangladesh at a nominal charge. What the post offices need for such electronic fund transfers are laptops equipped with software. The sender of money will convey to the receiver a secret number called Personal Identification Number (PIN). The receiver will walk to the post office, present his national identity card, mention the PIN he got from the sender and take cash in a matter of seconds or minutes.
With such electronic fund transfers made so easy in Bangladesh I was wondering the day perhaps is not far away when writing a cheque will be a fun for us too, like in America, to make payments to our friends, relations and the creditors.
In Bangladesh most people don't have any bank account though a great number of people have mobile phones. So, thanks to a huge network of wireless connectivity already in place, there is in our country a great potential for electronic banking, which is way cheaper and safer than paper-based banking as to hardware and software costs.
However, Bangladesh Bank would like to retain and improve the existing paper-based banking instruments. As such with a view to improving the country's payment system it has undertaken a programme called 'Bangladesh Automated Clearing House' as a part of US$ 46.13 million - project called 'Central Bank Strengthening Project, which is in operation since 2003. Of the total cost of the project the World Bank approved US$ 37 million and the rest US$ 9.13 million is supposed to be borne by the government of Bangladesh.
There are two views about whether Bangladesh for mass people's benefits should go direct to electronic banking phasing out paper-based banking or improve traditional paper-based banking and gradually embrace electronic banking.
There is a saying that one should climb each and every step of a ladder before reaching the top of a structure. There is also another saying that in this competitive world one cannot afford to waste time in climbing a ladder. One has either to jump or to be lifted onto the top of a structure by a substitute of a conventional ladder. The substitute may be a special spring boot that catapults you or a lift that pulls you onto the roof of a structure in no time.
Rural people in Bangladesh were not used to conventional land phones before they started buying mobile phones. So, an advice to climb up all the steps may sound like an advice to buy a manual type-writing machine first to get used to typing before touching a computer.
For the last few years Bangladesh Bank has been working to modernise the country's payment system with funds borrowed from International Development Association (IDA), the soft-loan window of the World Bank and the UK's Department for International Development (DFID) under the 'Central Bank Strengthening Project' (CBS Project). To automate the functions of payment system through the clearing houses under the control of Bangladesh Bank, a programme was launched in the name of Bangladesh Automated Clearing House (BACH) with two components: one is Bangladesh Automated Cheque Processing System (BACPS) and the other Bangladesh Electronic Funds Transfer Network (BEFTN). Bangladesh Bank decided to implement the BACPS first and then BEFTN.
Before understanding the idea of processing paper-based cheques by their images through an automated clearing system, we should know what is the 'clearing house' and how many of bank clients will be benefited by such automation process. We should also know whether the present system of clearing process is defective and direly needs automation, whether there is a cheaper alternative for increasing the efficiency of payment system and most importantly what is the cost the poor Bangladeshi people will have to defray for such modernity.
A clearing house meant for inter-bank payments is an office where banks exchange instruments and settle accounts. Now for a client in Dhaka city it takes not more than one day in between his submitting a clearing cheque and getting payment. That means if you present a clearing cheque to your bank today you will find your account credited in the morning of day after tomorrow. The whole process is done manually. Much less than one per cent of clients of banks located in cities issue account payee cheques that need to be routed through a clearing house. Most of the account payee instruments are government-issued cheques and banks-issued drafts and pay orders. On an average, not more than 3000 instruments including cheques are cleared everyday through the clearing house located at Dhaka office.
It is expected that when electronic fund transfer would gain ground against paper-based fund transfer the use of paper instruments will become unpopular the way letters, telegrams and money transfer through post offices have become extremely unpopular with mobile phones becoming very trendy---a scenario that is not a good news for those local and international giants who are still supplying required raw materials and machineries for paper-based banking instruments.
There may be some confusion about reliability, utility and efficacy of electronic way of transferring funds. Some may think they could always have concrete evidence in black and white if a payment is done through a cheque. Yes, it was so when electronic banking was not available.
I should say electronic transactions are rather more reliable than transactions through paper instruments. There is always an authenticated evidence of electronic transactions in the hard copies (in paper) generated by service providers against each and every electronic transaction. Cheques are dependent on a client's signature which varies and often invites complications while electronic transactions are dependent on PIN which is secure for both the bankers and their clients as there is less probability of cheating or getting cheated.
The only area, some may wrongly think, where cheques could be of importance is when a creditor needs a cheque, against products or services sold on credit. Under the present law if a cheque given by a debtor bounces, the creditor shows the bounced cheque to claim debts in a court of law. In electronic banking, too, a similar encoded promissory note may easily be made to be given which would be effective on a specific future date. If the encoded promissory note does not work on the specified date or later for receiving fund an automatically generated hard copy may be used as an evidence of breach of promise that can well be presented to a court of law for claims.
One may raise question as to why Bangladesh Bank had decided to implement BACPS, before BEFTN. Had BEFTN been implemented before BACPS the bankers would not have encountered the difficulties they are now facing. If electronic fund transfers between individuals and companies were encouraged and facilitated through a central server based in the central bank under their BEFTN programme we could find the use of cheques diminishing so greatly that it would perhaps have obviated the very need of BACPS and thereby could save millions of dollars on account of improving paper-based instruments. Implementation of BEFTN, which is more dependent on software, would have been many times cheaper than BACPS which is more hardware hungry.
However, with a view to implementing automated cheque processing system as a part of their BACH programme Bangladesh Bank directed all the banks to follow a set of specifications to standardise their cheque leafs which would be known as MICR (Magnetic Ink Character Recognition) cheques and make sure that all the account holders of all the bank branches in Dhaka city are given MICR cheques and not to send any conventional cheque (non-MICR cheque) to Dhaka Clearing House from April 01, 2010. In their latest circular the central bank has directed that all banks now have to pay Tk 100 in processing fees for every non-MICR cheque at the clearinghouse of its headquarters.
Since April 01, 2010, most of the bank branches in Dhaka city have miserably been failing to abide by the instructions of the central bank as to handling MICR cheques. The bankers and their clients are confused what to do in a situation when replacements of old cheque leafs by new MICR cheque leafs for all their account holders could not be possible and when hundreds of cheques, which were earlier issued, were all in non-MICR cheques. It was impossible to supply personalised cheque leafs to thousands of account holders.
The government cheques, drafts, pay orders, foreign drafts, treasury chalaans and many other instruments are yet to be standardised as MICR instruments. A gigantic MICR printing machine bought by Bangladesh Bank's Security Printing Corporation (Bangladesh) Limited (SPCBL) at Gazipur is not working well, especially when the machine has to run on a standby generator due to frequent power outage from the national grid. Government cheques with MICR features which could well be printed by SPCBL alone are now being printed partly by Bangladesh Security Printing Press (BSPP) at Tejgaon for the base sections and partly by SPCBL for the MICR sections, resulting in substandard printing quality.
The pandemonium that has been broken out in banks due to introduction of MICR cheques raises many questions in people's mind as to efficacy and benefits of the new system of payment.
As a client of a state-owned bank and also as a retired banker, I myself was baffled by some of the weird rules of the new system, especially the logic behind compulsory issuance of MICR cheque books to all the account holders, irrespective of their needs and types of accounts. Ninety-nine per cent of the account holders of banks in Bangladesh always use cheque leafs for cash over the counter and seldom issue any crossed cheques meant for a clearing house. A payment system like MICR cheques meant to serve less than one per cent of account holders should not be imposed for all and sundry to subscribe to. Could not it be made optional for bank clients, who want quicker service of clearing house, to subscribe to the new system or to buy a few MICR leafs as and when necessary, in addition to their conventional cheque leafs?
The new catchword MICR as something chic sounds enigmatic to many of us. A statement that the introduction of a Magnetic Ink Character Recognition (MICR) line on all cheques provides the mechanism for capturing cheque information electronically for providing the foundation for automated processing may enamour someone naïve, but is grossly a misleading idea as I have come to learn after my discussions with a number of IT experts at home and abroad.
MICR concept was a revolution in the early sixties when eyes of machines were too feeble even to read numeric characters, let alone texts. With number of clearing instruments mounting astronomically, to an extent of millions a day in the clearing houses, bankers in the sixties were desperately searching for a machine that could read numbers and automatically sort out the piled instruments inside the clearing houses in busy cities like New York and London. Powders of magnet laced with printing ink worked like a magical solution when such magnetic ink was used to print the numeric characters on the cheque leafs to prod the feeble eyes of the machines and accentuate their reading and sorting capability, ushering in a new ground-breaking name 'MICR banking instrument' that came with tamper-proof and high security special character schema. Many developed and developing countries, except Bangladesh, have since been using MICR instruments for ages for error-free sorting and swapping of instruments in clearing houses.
But time has changed and the golden era of MICR is already over. Now, for a poor country like Bangladesh who never used MICR cheques and the related machines it is foolishness not to adopt methods and machines that are way smarter and cheaper than those of MICR.
From what I could read in Bangladesh Payment and Settlement Systems Regulations, 2009 (BPSSR 2009), where there was not a single mention of the word MICR, it is evident that the authority concerned is also well aware of the fact that though MICR played a pivotal role in the automatic cheque clearing houses golden days of MICR are coming to an end, thanks to bionic eyes and Herculean capability of modern scanning and sorting machines to read, translate and sort any character and codes -- magnetic or non-magnetic or whatever. What is now modern is 'Image Truncation Technology' and BPSSR 2009 has rightly highlighted the aspects of "Cheque Truncation and Electronic Cheque Image Presentment".
One may now wonder why then all these hooplas about MICR cheques are in this age of 'Image Truncation Technology'. Unless MICR prints are already there in the old stocks, there is no need for printing any portion of a cheque newly in MICR because today's image truncation technology no more needs characters to be printed in magnetic ink. Bangladesh Bank in their instruction letters has rightly directed all the concerned banks to print their cheque leafs to be compatible with image truncation methodology. But surprisingly it has also given a contradictory instruction to print the leafs with an MICR line as well in the area meant for cheque serial number, routing number, account number and transaction code, etc. The confusing instruction, frankly speaking, sounds like advising one to write a letter 20 per cent by a manual type-writing machine and the rest 80 per cent by a computer.
There is perhaps a serious lapse in the whole process of automation of the clearing house and electronic banking that are being practiced in Bangladesh. The new electronic systems have not yet been placed before the law makers. A citizen cannot be advised to participate in any service of public interest or in any new system, especially when it relates to financial interests, unless a law clearly defining the rights of the beneficiaries of the service and the obligations of the service providers is enacted by the parliament and published in the government gazettes. Plus, millions of shareholders of bank companies have their right to know what benefits the newly adopted system would bring for the interest of the general public and for the profit of the shareholders.
As far as my knowledge goes there has not been, till today, any amendment made to Negotiable Instrument Act (N.I. Act) as to 'electronic fund transfer' or to other aspects of modern banking like 'the use of images of Cheques' etc. It is a matter of great surprise how the country's monetary watchdog, in the absence of such an amendment to N.I. Act, allowed or dictated the commercial banks to offer services as to modern e-banking like electronic fund transfer through ATM machines and mobile phones and settlements of payments through images of special cheques, so-called MICR cheques.
A regulation approved by our central bank is not a law and hence under no circumstances should be binding on a vital public interest on the negotiability of electronic banking instruments.
If today a bank client is cheated by someone or if a deceitful client frauds a bank in any electronic banking transactions the aggrieved entity, unless the N.I Act is amended as to such electronic transactions, will not find a relief in any court of law and, I am afraid, the expenditure the commercial banks have now been incurring in installing all the electronic gadgets for e-banking may be deemed unlawful and may not be overlooked by statutory audit authorities and the banks' shareholders in the future.
It was reported, that some banks had hurriedly purchase security papers, electronic gadgets and services at higher than normal price for replacing all the normal cheques by MICR cheques for all the clients of all the branches of all the banks that are members of Clearing Houses---no matter all the clients would be benefited or not.
One wonders what will happen if our parliamentarians after weighing the pros and cons of MICR cheques decide not to approve of an amendment to N. I. Act in this regard. MICR cheques, the law makers may think, would be of benefit to only a handful of bank clients, not of any benefit to the multitude of the poor and the general clients!
Nowadays while foisting any shoddy goods or services upon gullible clients the easiest method of cheating people of a developing country like Bangladesh or Cambodia or Nigeria is to refer to unfathomable science and blurt out some incomprehensible scientific jargons. The cheating becomes much easier if somehow any so-called expert from the development country can be made available to explain in his unintelligible accent the eerie science of information technology, for example, to a high-ranking banker who never did touch the mouse of a computer.
International business entrepreneurs who are unable to survive in the neck breaking competition in the West are of late crowding our markets with a view to implementing their shrewd ideas, some of course well, but mostly bad propositions. In most cases, some vested quarters are now busy selling obsolescent products and services, not salable in the developed countries, in the name of digitisation now that they know we are all a little obsessed with anything digital.
The writer can be reached at e-mail : maswood@hotmail.com