Revised process meant to inculcate discipline
ALLOW US to clarify the various issues/concerns raised by Cagayan de Oro Rep. Rufus Rodriguez and his brother, Abante Mindanao party-list Rep. Maximo Rodriguez Jr. in the news article titled “Repeal of BSP rule on check clearing sought.” (Inquirer, 5/6/11) The two filed House Bill 4345 seeking the repeal of Bangko Sentral ng Pilipinas (BSP) Circulars 681 and 705 (Revised Check Clearing and Settlement Processes) dated Feb. 8, 2010 and Dec. 29, 2010, respectively, which mandate bank check clearances on the same day instead of three days.
Issue 1. That on-same-day clearance is very detrimental to many check writers because those with insufficient funds would no longer have a chance to fund their accounts. This is so since the drawee bank is required to return a check to the negotiating bank not later than 7:30 a.m. of the clearing day immediately following the check presentation date.
The change in the clearing process is aimed at instilling discipline among the depositors. When issuing checks, they should know whether or not their respective accounts have sufficient funds. With this new process, the problem of “check kiting” will be mitigated as checks with insufficient funds (approximately 94.7 percent of dishonored checks) will be returned immediately. The revised process is a product of careful study and consultations among the members of the banking industry. Establishing the guidelines on the handling of overdrafts by banks will improve public confidence in and strengthen the integrity of the country’s check clearing and settlement system.
Issue 2. That the fees charged by the banks for returned checks are onerous.
The fees charged, based on the rules on returned checks promulgated by the Philippine Clearing House Corp. as affirmed by the Bankers Association of the Philippines (BAP) Board, are aimed to discourage and deter the issuance of insufficiently funded checks. Information on the penalty for returned checks was disseminated to the depositors/clients by the banks. These fees were fixed in April 2004 and have not changed since then.
Issue 3: That there were instances when there was no intent to defraud, but a bank client “absent-mindedly issued” a check or was unaware the account had been depleted in the case of a joint account.
When the BSP prepared the circular, it saw to it that it would be applicable to all without distinction or discrimination. Thus, the BSP leaves it to the bank’s discretion to determine who among their clients would be allowed overdrafts. While the BSP has not yet received any formal complaint on the matter, prudent evaluation of the impact of the Revised Guidelines on Check Clearing and Settlement Processes may be undertaken during the initial year of implementation. For now, there is no indication that the new system has spawned an onerous condition that has led to many complaints that would justify the BSP circulars’ repeal.
—DIWA C. GUINIGUNDO,
deputy governor,
Bangko Sentral ng Pilipinas
