PSD Circular No. 01: Clearing charge for BACH transaction

Department of Payment Systems Department of Payment Systems Payment Systems Department Bangladesh Bank Head Office Dhaka. PSD Circular No.-1/2013

Managing Director/Chief Executive Officer All Scheduled Banks operating in Bangladesh Dear Sir,

Regarding the collection of clearing charges on transactions conducted through the Bangladesh Automated Clearing House (BACH).

Reference is invited to Circular No. 3/2012 dated 13 November 2012, which imposed a clearing charge on transactions conducted through the Bangladesh Automated Clearing House (BACH).

In order to expedite and secure the settlement of inter-bank transactions, BACH was launched in 2010, consolidating 41 clearing houses across the country into a single integrated clearing system. BACH has two branches - the Bangladesh Automated Check Processing System (BACPS) and the Bangladesh Electronic Funds Transfer Network (BEFTN) - which are providing world-class services to customers through banks. Although inter-bank transactions are settled through the central bank's clearing house in our country, in more developed countries including neighboring countries, the clearing system is operated by a separate subsidiary institution formed by members of the clearing system, based on the costs of the institution, for the sake of efficient and advanced management. As a preliminary step to adopting the same model in operating the high-tech BACH, PSD Circular No. 3/2012 imposed a minimum charge on transactions through BACH. Considering the responses from various quarters on this matter, it has been decided to redefine the structure of the charge as follows, so that the distribution of charges between BACH and participating banks is rationalized and some transactions are temporarily exempt from charges.

(1) All types of check clearing charges for amounts less than 50,000 Taka will be exempt; (2) To encourage the use of electronic methods instead of checks, all BEFTN transactions will be exempt from charges; (3) All types of A2C (Government to Individual) check clearing will be exempt from charges; (4) Checks received against any amount of government receipts (e.g., against challans or for the purchase of savings certificates), utility bills, and all checks received against various dues of City Corporations/Municipalities will be exempt from clearing charges; (5) A charge of 10 Taka (including VAT) will be collectible for clearing checks of amounts 50,000 or more but less than 500,000 Taka; of which 8 Taka will be receivable by BACH and 2 Taka by the presenting bank; (6) A charge of 60 Taka (including VAT) will apply to high-value checks (500,000 Taka or above) from any region of the country for Same Day Clearing (SDC), of which 50 Taka will be receivable by BACH and 10 Taka by the presenting bank. However, if checks of 500,000 Taka or above are presented for Regular Value Clearing, a maximum charge of 25 Taka (including VAT) will apply, of which 20 Taka and 5 Taka will be receivable by BACH and the presenting bank respectively; (7) The prescribed charge will be collected from the payee (drawee) of the check. However, any bank may, at its own discretion, pay the charge receivable by BACH from its own source without collecting the charge from the customer.

For the convenience of charge calculation, each participating bank will submit a list containing details of transactions subject to clearing charges conducted in the previous month (e.g., check number, date of presentation, and amount) to this department by the second working day of the following month.

The amended clearing charge will remain in effect from March 2013 until further orders are not issued.

Kindly acknowledge receipt.

Yours faithfully, Signed (S.M. Rezaul Karim) Deputy General Manager Phone: 9530311 Date: 28 February 2013 16 Falgun 1419