outward clearing. outward clearing (outwrdclg) table of contents introduction slide 2 introduction...

Outward Clearing

Outward Clearing (OUTWRDCLG)

Table of ContentsIntroduction

Slide 2

• Introduction

• Business Scenario

• Finacle CBS Process Overview • Key Terminologies

• Step by Step Process

• Demonstration

• Summary

Outward Clearing (OUTWRDCLG) Slide 3

Introduction

Lesson Objective

Duration

Intended Audience

To understand the process and concept of outward clearing in Finacle CBS

1 Hour

Customer Service


Business Scenario

A Customer of your PO deposits a cheque for collection, drawn on another bank in your locality. You can perform the collection through local clearing. How will you lodge the cheque in local clearing and send it for collection in Finacle CBS?

Let us see the generic process in detail for Outward Clearing in Finacle CBS.


PROCESS OF OUTWARD CLEARING AT SUB-OFFICE (SO)

Approach for outward clearing at Sub Office (SO) in

Finacle CBS

Outward Memo for Sub-Office

“HOMSO”

Report of HOMSO“CHQLR”

The following functions can be performed for capturing the details of the instrument from the menu option “HOMSO” A-AddM-ModifyI-InquireV-Verify

The following functions can be performed for capturing the details of the instrument from the menu option “HOMSO” A-AddM-ModifyI-InquireV-Verify

The report to be generated by SO by invoking menu option “CHQLR” for generation of report for the cheques captured in the system and will tally the same with the instruments before sending to HO.

The report to be generated by SO by invoking menu option “CHQLR” for generation of report for the cheques captured in the system and will tally the same with the instruments before sending to HO.


PROCESS OF OUTWARD CLEARING AT HEAD OFFICE (HO)

Approach for outward clearing at Head Office (HO) in

Finacle CBS

Maintain a Clearing Zone (HMCLZOH)

Clearing Zone Transaction (HOCTM)

The following functions could be performed:•Opening an Outward Clearing Zone•Suspending a Zone•Revoking suspension•Inquiring a zone•Deleting a zone•Releasing zone to Shadow Balance•Regularizing Shadow Balance

The following functions could be performed:•Opening an Outward Clearing Zone•Suspending a Zone•Revoking suspension•Inquiring a zone•Deleting a zone•Releasing zone to Shadow Balance•Regularizing Shadow Balance

The following functions could be performed:•Add •Modify•Delete•Verify•InquireInstruments are lodged only for the opened zonesThe user has the following options for entry of instruments:•Multiple instruments for a single credit•Single instrument for a single credit•Single instrument for multiple credit

The following functions could be performed:•Add •Modify•Delete•Verify•InquireInstruments are lodged only for the opened zonesThe user has the following options for entry of instruments:•Multiple instruments for a single credit•Single instrument for a single credit•Single instrument for multiple credit


The approach for Outward Clearing in Finacle at SO:


Finacle Process Overview

The approach for Outward Clearing in Finacle at HO:

Uploading the instrument at HO by invoking the menu option “HCLUPLD”


Key Terminologies

TERMS DESCRIPTION

1 Clearing

The members (Post offices, Banks or FIs) of a Local Clearing House exchange the instruments (cheques, Demand Drafts and so on) drawn on them and issued by them for debiting and crediting the proceeds respectively, through a net settlement process.

2 Clearing HouseA place where representatives of all FIs meet at specified time, to exchange instruments and workout the net balances against each other.

3 Clearing Zone

A Zone in Finacle identifies the time and instrument-value-based segregation. For example, there could be separate zone for High Value Instruments, MICR instruments and non-MICR instruments. Instruments are lodged and sent to clearing house depending on the segregation and on the time to the clearing house.

4Drawee Post Office/FI/Bank

The Post Office which receives the instrument drawn on it.

5Collecting Post Office/FI/Bank

The Post Office that presents the cheque and collects the proceeds from the drawee Post Office, and credits it to the beneficiary’s account.

6 BeneficiaryThe person to whom the proceeds of the instrument need to be credited.

7 Outward clearing Any instrument that is sent for collection and the proceeds are realized.

8 Inward ClearingInstruments drawn on the accounts of customers and received for collection from other institutions on behalf of their customers.

9 Outward reject Any instrument that is sent for collection and is returned unpaid.


Key Terminologies (Contd…)

TERMS DESCRIPTION10 Inward reject

Any instrument which is received for clearing and is returned to the presenter Bank/Branch on account of non-payment for any reason.

11 InstrumentAn instrument is referred to any Negotiable instruments like Cheque, Demand Draft, Interest Warrants, Dividend Warrants and the likes.

12 Sort codeSort code is a 9 digit clearing MICR code where the first 3 digits is a city code, next 3 digits is a bank code and the last 3 digits is the branch code.

13 Float balanceIt is a sum of all the instruments which are lodged in outward clearing zones for the day.

14Shadow balance/ un-cleared balance

During outward clearing, the Post office releases the credit to the customer’s account. However, that amount is unavailable for withdrawal because the instrument presented by the customer is subject to realization at the drawee branch.

15Release to Shadow Balance

A process of crediting the proceeds of funds in clearing to the customer’s accounts, but will not be made available for withdrawal.

16 RegularizationThe amount that has been marked as a shadow balance is made available to the customer.

17 Set

A bunch of pay-in-slip/ credit vouchers and instruments (Cheque, Demand Draft, Banker’s Cheque and the like) where the credit leg (Amount as per pay-in-slip/credit vouchers) and the debit leg (Amount as per cheque, Demand draft, Bankers cheque) is balanced.


Given below is the step by step process to perform the outward clearing in Finacle at Sub Office (SO)

Invoke the menu option HOCSO for lodging of the instruments at Sub Office level.

The report to be generated by SO by invoking menu option “CHQLR” for generation of report for the cheques captured in the system and will tally the same with the instruments before sending to HO


Step by Step Process

Given below is the step by step process to perform the outward clearing in Finacle at Head Office (HO)

Invoke the menu option HMCLZOH (Maintain Outward Clearing Zone) to open a zone.

Invoke the menu option HOCTM (Outward Clearing Transaction Maintenance Online) to lodge and Verify (Set-wise instrument) and HOCTV (Verification of bulk instruments) an instrument.

Invoke the menu option HMCLZOH to suspend the zone.

Invoke the menu option HMCLZOH to release the lodgement to the shadow balance.

Invoke the menu option HMCLZOH to regularize the shadow balance to regularize the zone.

HO will upload the instrument by invoking the menu option CLUPLD


CHEQUE TRUNCATION SYSTEM (CTM)

Process of Cheque Truncation System

HO will scan the cheques in the CTS systemThe Service HO will generate a consolidated file of all the cheques that have been captured in the CTS system by the HO’s reporting to it.The service HO would open an outward clearing zone and upload the file generated from CTS to FinacleCTS would also generate a file to be sent to Clearing House.The non-banking cheques should be captured in the office account meant for non-banking cheques in the CTS systemThe Service branch will then release the zone

Process of Cheque Reject in CTS

CTS would receive the rejected cheque details from Clearing HouseCTS will generate a file in Finacle in a specific format with the rejected cheque detailsThis file would then be uploaded in the Finacle system by Service branch userThe Finacle user would mark the cheques as rejectedThe clearing zone would then be regularizedThe non-banking cheques fund would lie in the office account for further action

Process of Cheque Truncation System

HO will scan the cheques in the CTS systemThe Service HO will generate a consolidated file of all the cheques that have been captured in the CTS system by the HO’s reporting to it.The service HO would open an outward clearing zone and upload the file generated from CTS to FinacleCTS would also generate a file to be sent to Clearing House.The non-banking cheques should be captured in the office account meant for non-banking cheques in the CTS systemThe Service branch will then release the zone

Process of Cheque Reject in CTS

CTS would receive the rejected cheque details from Clearing HouseCTS will generate a file in Finacle in a specific format with the rejected cheque detailsThis file would then be uploaded in the Finacle system by Service branch userThe Finacle user would mark the cheques as rejectedThe clearing zone would then be regularizedThe non-banking cheques fund would lie in the office account for further action


Demonstration


Summary

Congratulations!! You have successfully completed the lesson on Outward Clearing. Following is the summary of important points discussed in this lesson:Process of Outward clearing at Sub-Office (SO)•Invoke the menu option “HOMSO” for lodging and for verification of the instruments•Invoke “CHQLR” for generating the report for the instruments lodged and tally the instrument with the system, send the cheque to HO Process of Outward Clearing at Head Office(HO)Opening of a zone by invoking menu option “HMCLZOH”•Uploading the file generated by SO through menu option “HCLUPLD”.•Lodging can also be done of the instruments in the zone using the menu option HOCTM at HO•Invoke menu option HOCTM(Set-wise verification)/HOCTV(Bulk verification)•Suspend the zone by invoking HMCLZOH so that no more instruments could be lodged in that zone.•Release the instruments to the shadow balance by invoking HMCLZOH.•Rejection of the cheques have to be marked.•After realisation of outward clearing, regularize the shadow balance by invoking HMCLZOH. The status of the zone will be CLOSED.•The process of Cheque Truncation System (CTM)•Finacle CBS also facilitates marking a specific instrument, bank/branch pending from the existing clearing lot processing for any valid reasons. This can be done by invoking the menu option HMARKPEN•This pending status of instrument, bank/branch can be revoked later by invoking the menu HREVPEND

Congratulations!! You have successfully completed the lesson on Outward Clearing. Following is the summary of important points discussed in this lesson:Process of Outward clearing at Sub-Office (SO)•Invoke the menu option “HOMSO” for lodging and for verification of the instruments•Invoke “CHQLR” for generating the report for the instruments lodged and tally the instrument with the system, send the cheque to HO Process of Outward Clearing at Head Office(HO)Opening of a zone by invoking menu option “HMCLZOH”•Uploading the file generated by SO through menu option “HCLUPLD”.•Lodging can also be done of the instruments in the zone using the menu option HOCTM at HO•Invoke menu option HOCTM(Set-wise verification)/HOCTV(Bulk verification)•Suspend the zone by invoking HMCLZOH so that no more instruments could be lodged in that zone.•Release the instruments to the shadow balance by invoking HMCLZOH.•Rejection of the cheques have to be marked.•After realisation of outward clearing, regularize the shadow balance by invoking HMCLZOH. The status of the zone will be CLOSED.•The process of Cheque Truncation System (CTM)•Finacle CBS also facilitates marking a specific instrument, bank/branch pending from the existing clearing lot processing for any valid reasons. This can be done by invoking the menu option HMARKPEN•This pending status of instrument, bank/branch can be revoked later by invoking the menu HREVPEND


Any Questions?


Assessment and Evaluation

Now let us do a hands on exercise on this topic. Please refer to the Hands on exercise section of the job aid

Outward Clearing (OUTWRDCLG)

THANK YOU!

Slide 18

outward clearing. outward clearing (outwrdclg) table of contents introduction slide 2 introduction...

Documents

outward clearing slide

outward clearing zone

process of outward clearing

concept of outward clearing

local clearing

clearing zone hmclzoh

multiple credit slide

finacle cbs outward