KARACHI: The State Bank of Pakistan said Monday it will begin a pilot project on Oct. 15 to clear cheques through electronic images instead of physical instruments, with nationwide coverage expected by April 30, 2027.
The Pakistan Express Clearing System, or PECS, is based on the concept of cheque truncation defined in the Payment Systems and Electronic Fund Transfers Act, 2007, the central bank said in a circular.
The SBP said the system is intended to strengthen the country's digital payments ecosystem and make clearing and settlement more efficient.
Under the system, the presenting or collecting bank will capture images of cheques and send them to the clearinghouse, National Institutional Facilitation Technologies Limited, known as NIFT.
NIFT will pass the images to the paying or drawing bank for processing. The SBP also issued rules, procedures and operational instructions for the system, along with an implementation plan.
A cheque will be truncated at the branch of the presenting institution, and every later step in clearing will use the electronic image and its associated clearing data, the central bank said. The paying institution will decide whether to pay or reject the cheque based on the image. The physical cheque will remain with the presenting institution until the clearinghouse collects it.
If the paying institution doubts the authenticity of the instrument or the contents of the image, it can mark the cheque "Defer for Physical," the SBP said.
The pilot will run in phases. In the first, from Oct. 15 to Nov. 15, the system will operate at a limited number of participating institutions selected by the SBP in consultation with NIFT. The clearinghouse and participating institutions will then review the results and address any issues, and the clearinghouse will submit a consolidated readiness report to the central bank.
In the second phase, from Nov. 16 to Dec. 31, the system will be extended to all remaining participating institutions, which will progressively roll out cheque truncation across their branch networks. All participating institutions must develop the required infrastructure and achieve nationwide implementation by April 30, 2027, the central bank said.
Cheques can be captured in two ways. Under the primary mode, branch capture, the presenting institution's branch will scan the cheque, either on its own premises or at a nearby designated branch, using a compliant scanner and send the image through the clearinghouse's system. If a branch cannot use that mode, it can fall back on bureau capture, under which NIFT will collect the cheque, scan it and transmit the image to the paying institution.
