Cheque and Credit Clearing Company

Cheque and Credit Clearing Company

The Cheque and Credit Clearing Company Limited is a membership-based industry body with 12 settlement members. The company has managed the cheque clearing system in England and Wales since 1985, and in all of Great Britain since 1996 when it took over responsibility for managing the Scottish cheque clearing as well.

As well as clearing cheques, the system processes the following forms of payment: banker's drafts, building society cheques, postal orders, warrants, government payable orders and traveler's cheques. The company also manages the systems for the clearing of paper bank giro credits (the credit clearing) and euro cheques (the euro clearing).

The clearing system in Northern Ireland is operated by the Northern Ireland Bankers’ Clearing Company.

Members of the Cheque and Credit Clearing Company are individually responsible for processing cheques drawn by, or credited to, the accounts of their customers. In addition, several hundred other institutions provide cheque facilities for their customers and obtain indirect access to the cheque clearing mechanisms by means of commercially negotiated agency arrangements with one of the full members.

The Cheque and Credit Clearing Company members, known as clearing banks are:—

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In 2009 three and a half million cheques and three hundred thousand paper credits passed through the British interbank clearing system each working day. Cheque volumes reached a peak in 1990 when 4 billion cheques were written but usage has fallen since then. This is mainly due to alternative methods of payment such as Direct Debits, Bacs payments and more recently, the Faster Payments Service, being used more widely by both individuals and businesses. The annual rate of decline of the volume of cheques being used is now in double figures.

2-4-6 changes to cheque clearing

From the end of November 2007, changes known as 2-4-6 came into force. These have increased clarity and certainty when paying in cheques to a bank or building society account.

The 2-4-6 changes set a maximum time limit of two, four and six working days for each of the stages after paying in a cheque to a current or basic bank account. The timescales cover cheques, bankers' drafts, bankers' cheques and building society cheques paid in to sterling current and basic bank accounts. For deposit or savings accounts the maximum time limit for withdrawal is longer (6 days, rather than 4).

For the first time, after paying in a cheque, customers can be sure that at the end of six working days, the money is theirs. They are protected from any loss if the cheque subsequently bounces, unless they are a knowing party to a fraud. The timescales also set maximum times when customers start earning interest on money paid in (2 days) and when it will be available for withdrawal.

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