Bankers gear up for new check, clearing rules

MANILA, Philippines - The Bankers Association of the Philippines (BAP) is reminding the banking public of the new regulations on checks and check clearing issued by the Bangko Sentral ng Pilipinas (BSP) recently.

One of the regulations classifies a check as “bounced” if it is backed by insufficient funds. Banks are likewise ordered to immediately disregard the check “subject to applicable penalties and handling charges.”

BSP Circular 705 likewise states that stop payment order (SPO) will not be entertained, or considered, unless the instruction is placed or relayed on or before the day of the deposit or presentation of the check/s subject by an SPO.

All banks are also required to return unfunded checks no later than 7:30 a.m. of the following banking day after checks are deposited or presented for clearing. 

BAP president Aurelio Montinola III said that the new BSP mandate is expected to oblige bank account holders to manage their checking accounts properly and to a large extent discourage the issuance of checks not sufficiently funded or not funded at all. 

“It is always good to exercise prudence when writing checks,” Montinola said.

The new circular instructs that all checks classified as of check and other cash items (COCI) will only be conducted from two in the wee nours of teh morning to 7:30 a.m. on the clearing day immediately following the original date of pesentation of the COCI to Philippine Clearing House Corp. (PCHC) and Regional Clearing Centers (RCC).

“The new BSP mandate is expected to oblige bank account holders to manage their checking accounts properly and to a large extent discourage the issuance of checks not sufficiently funded or not funded at all. It is always good to exercise prudence when writing checks,” the BAP president added.