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History
Payment systems and payment services perform a key role in the efficient functioning of the financial systems by ensuring financial transactions are settled timely, reliable and securely, as vital ingredients to maintain financial market confidence. In spite of various cashless payment instruments in the country, larger than 90 percent of the total value of cashless retail payments are done through cheques. This statistic alone highlights the importance of cheque-based transactions in the national payment system.
With the increase in the volume of cheques and the computerization of banks, the Central Bank of Sri Lanka (CBSL) decided to automate the cheque clearing system for speedier and accurate processing. To achieve this objective Sri Lanka Automated Clearing House (SLACH) was established within the purview of the Information Technology Department of the Central Bank of Sri Lanka. SLACH commenced operation on 2nd March 1988. Later, computerized “High Speed Document Processors” (Reader/Sorter equipment) and new cheques were introduced with MICR (Magnetic Ink Character Recognition) characters.
Using the present MICR system, the SLACH operated the cheque clearing system for the past 14 years. In year 2002 the Central Bank of Sri Lanka decided to divert the activities of the SLACH to its users namely commercial banks operating in Sri Lanka. As a result, LankaClear (Pvt) Ltd was incorporated under the Companies Act and took over the activities of Sri Lanka Automated Clearing House (SLACH) on the 1st of April 2002, the Central Bank of Sri Lanka and all commercial banks operating in Sri Lanka as its shareholders.
After the divestment, LankaClear was able to reduce the cheque processing time by 6 hours, enabling banks to reduce their cheque realization time. In spite of all these changes, cheques out side Greater Colombo Region took relatively from 1 to 7 days to clear.
LankaClear with its commitment to deliver its value to outstation bank branches as well, explored alternatives to improve the clearing cycle to ensure a cheque clearing cycle for the whole country to be in 1 day and for customers to receive their funds the next working day.
In a bid to reduce risks, time, and eliminate ad hoc clearing practices and standardize the process, LankaClear decided to embrace image clearing in the year 2004. |
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