Clearing System in Indian Banks

Abstract

Banking system of a country is the back bone of its financial system. The major challenging task of the bank is clearing customers’ cheques. In a developing country like India, the volumes of cheques sent for clearance are growing fast. So an effective and efficient system of handling clearance process has to be developed. Reserve Bank of India (RBI) which is the apex of Indian Banking system manages the clearing process in India. It has made this clearing process effective by implementing latest technological based method like other developed countries. This article talks about the practices followed in India relating to clearing system.

Keywords: Cheque Truncation, Electronic Fund Transfer, Electronic Clearence system, Real Time Gross Settlement