Overview

Traditional USD draft clearing took more than three weeks to credit customers. This is due to local banks having to send USD drafts to the respective 'Nostro' account maintaining banks which were based abroad.

To overcome the lengthy clearing process, LankaClear (Pvt) Ltd launched USD Draft Clearing System in 2002. At the time, a semi-computerized clearing system was used for clearing of drafts denominated in US dollars issued by Licensed Commercial Banks (LCBs) in Sri Lanka and payable to Sri Lankan individuals and institutions. This system was also used to clear drafts issued by banks’ exchange houses abroad and drawn on LCBs in Sri Lanka. As a result, the time taken to clear USD drafts were reduced from three weeks to four days. It also saved the clearing fees chargeable from the banks significantly.

With a view of continuously improving the services provided by LankaClear to its members, LankaClear launched the US Dollar Draft Online Image Transfer System (UITS) on 24th July 2019. UITS is functioning as a web based online clearing system and eliminates the need to physically present the drafts for clearing. UITS also improves the clearing time to T+1.

Currently there are 23 licensed commercial banks connected to UITS. UITS covers the clearing of following instruments:

  • USD drafts issued by commercial banks in Sri Lanka payable to Sri Lankan individuals and institutions.
  • USD drafts issued by banks or exchange houses abroad drawn on commercial banks in Sri Lanka

Benefits of US Dollar Draft Online Image Transfer System

  1. Eliminates the need for bank staff to visit LankaClear to exchange physical USD drafts.
  2. Clearing timelines improved to T+1 (Today + One business day).
  3. Operations of all UITS clearing sessions (outward, inward, outward return and inward return) handled by a single application provided by LankaClear to the participating members.
  4. Bottlenecks and delays associated with the paper work eliminated.
  5. End to end encryption, non-repudiation and authenticity of image transmission ensures the security and the integrity of the clearing operations.
  6. Automated digital certificate issuance, revocation and validation application programing Interfaces (API) provides better security and convenience.

UITS Clearing Process in Brief


  1. Customers deposit USD drafts at Bank A.
  2. USD drafts are processed by Bank A and electronic image and data sent to LankaClear online. The physical draft is kept at Bank A. This is known as Outward
  3. LankClear receives the electronic image and data and distributes them to Bank B to make the decision on payment. This is known as Inward
  4. If bank B decides not to accept the payment of the draft, Bank B submits return data online. This is known as Outward Return.
  5. If LankaClear receives returns from Bank B, return data and return notifications are generated and the data is sent to Bank A. This is known as Inward Return.
  6. The net settlement amount of the clearing day transferred by LankaClear to Settlement Bank to settle participating bank accounts. The customer receives funds or return notice on T+1 basis.

Participation for US Dollar Draft Online Image Transfer System
All Licensed commercial banks operating in Sri Lanka are eligible to participate for UITS.

Data Submission Mode
UITS is fully online payment systems and all clearing sessions data submission and retrieval done online.

Settlement Bank
Current settlement bank for the UITS is Sampath Bank PLC. LankaClear appoints a settlement bank once in three years.

Clearing Cut-off Times


Current participating banks

  1. Bank of Ceylon
  2. Standard Chartered Bank
  3. Citibank N. A.
  4. Commercial Bank of Ceylon PLC
  5. Habib Bank Limited
  6. Hatton National Bank PLC
  7. Hongkong and Shanghai Banking Corporation
  8. Indian Bank
  9. Peoples Bank
  10. State Bank of India
  11. Nations Trust Bank PLC
  12. Deutsche Bank AG
  13. National Development Bank PLC
  14. MCB Bank Ltd
  15. Sampath Bank PLC
  16. Seylan Bank PLC
  17. Public Bank Berhad
  18. Union Bank Of Colombo PLC
  19. Pan Asia Banking Corporation PLC
  20. ICICI Bank
  21. DFCC Bank PLC
  22. Amana Bank PLC
  23. Cargills Bank Limited

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