FAISAL KHALID

SHAKEEL AHMED MEMON

WALEED BIN RASHID

Agenda
Negotiable

instrument and Endorsement

Clearing

services

Clearing

services offered by banks

Role

of NIFT in clearing

Role

of SBP in clearing

NEGOTIABLE INSTRUMENT
A negotiable

instrument is a document
guaranteeing the payment of a specific amount of
money either on demand or at a set time.

Promissory

note, bill of exchange and cheque are

three main types.

Characteristics of negotiable
instruments
Transferable

ownership
Holder`s right to use
Contract for payment of money
No limitations on number of transfers

Functions of Negotiable instruments

Substitute

for money
Credit device
Record Keeping device

Endorsement

ENDORSEMENT

TYPES OF ENDORSEMENT
BLANK
FULL

ENDORSEMENT

ENDORSEMENT

CONDITIONAL
RESTRICTED

ENDORSEMENT

ENDORSEMENT

BLANK ENDROSMENT

In blank endorsement transfer is not mentioned

Full Endorsement

Conditional Endorsement

Restricted Endorsment

Principles of Endorsment
Only

order instrument can only be endorsed.

Bearer

instrument ownership transfers by

delivery.

If

cheque is crossed as Payees account only then

this cheque can not be endorsed.

Clearing

WHAT IS CLEARING?
Clearing

is the system through which processed

are collected or paid against instruments
deposited by customer.

TYPES OF CLEARING
INWARD

CLEARING

OUTWARD

CLEARING

CLEARING INSTRUMENTS

BANKERS CHEQUE

1.

Pay order

2.

Demand draft

3.

Travelers cheque

PERSONAL CHEQUE

DIVIDEND WARRENTS

WHY CHEQUES RETURN?

Drawee`s signature differ from specimen

Cheque post dated

Cheque is out of date (stale)

Amount in words and figure differs

Alteration required signature

Cheque multilated

Payment stop by drawee

Fund insufficient

Clearing stamp required

Cancle previous stamp

WHY CHEQUES RETURN?

Payees endorsement required

Payees endorsement required bank confirmation

Others

CLEARING HOUSE
A

bankers' establishment where cheques

and bills from member banks are
exchanged, so that only the balances need
be paid in cash.

NIFT

In the major cities of Pakistan thousands of cheque transported every day.

These cheques required sorting branch wise and their scrutiny on daily basis
without delay of time.

For this great magnitude, SBP authorized NIFT to handle clearing in big cities.

NIFT is providing services in 140 cities.

NIFT coordinate members bank and SBP in settlement of their claims.

Where there is no any NIFT office, on the behalf of SBP, NBP perform clearing
process.

PREPARING NIFT CLEARING

SCRUITINISING

STAMPING

ADDING FIGURES

SEALING

DELIVERY

SCRUITNY OF CHEQUE

Date

Amount-words figure mismatched

Signature on alteration.

Tempered

Stale

Mutilated

ROLE OF
NATIONAL INSTITUTIONAL FACILITATION
TECHONOLOGIES PVT LIMITED (NIFT)

NIFT SERVICES
Normal

Cheque processing in 2 working days

SAME

CLEARING

DAY CLEARING

Cheque processing in 3 hour process

INTERCITY

CLEARING

Cheque processing in 48 hours

OVERNIGHT

CLEARING

24 Hour clearing cycle

US

DOLLAR CLEARING

Role Of State Bank Of Pakistan in

Clearing