nift

2. NIFT
National Institutional Facilitation Technologies

3. Group Members
Muhammad Imran
Waheed ul Asar
Munawar Hussain
Saqib Yousaf
 Mirza Rustam Ali

4. Muhammad Imran
Introduction of NIFT:

5. Introduction of NIFT:
 National Institutional Facilitation Technologies (Pvt.) Limited
 Incorporated in September 1995 between
 Habib Bank Limited
 United Bank Limited
 National Bank of Pakistan
 MCB bank limited
 Allied Bank Limited
 First women bank limited
1.major six bank , which includes
2.Private entrepreneurs

6. Introduction of NIFT:
 A licensed clearing house of Pakistan
 NIFT’s Board comprises of 14 directors;
7 from banks and 7 from the private sector.

7. Introduction of NIFT:
 All Scheduled banks operating in Pakistan are :
_members of NIFT's clearing system and
the State Bank of Pakistan monitors the
clearinghouse operations.
 40 commercial banks and their 5571 branches in 185
major cities, 20 data centers utilize NIFT’s services.

8. SBP and NIFT:
 supervisor for NIFT operations
 customer and member bank of the automated
clearing house
supervisor for
NIFT operations
customer and
member bank of
the automated
clearing house

9. SBP and NIFT:
 SBP and NIFT :The NIFT collects the financial
instruments and after processing them provides the
inter-banks’ position for
 Settlement to the concerned SBP-BSC (banking services
corporation) office where the position of each bank is
settled by making debit / credit entries in their respective
current account.

10. Components of NIFT
Munawar Hussain

11. Components of NIFT
 A Division of NIFT
 A certificate authority in pak
 Established to facilitate to provide PKI (public key
infrastructure) based security solution for e-business , e-
banking , e- government .
 Provide other information security related service to
large corporation and banks.
1.NIFTeTRUST

12. Components of NIFT
 Wholly subsidiary
 ISM operate from all fifteen centers where NIFT has
established the clearing facilities.
 Unique experience to bring six large banks and private
sector on one platform to help modernize payment
system in Pakistan.
 Offer enterprise content management services
2.ISM – Image System Marketing (pvt.)
Limited

13. Components of NIFT
 NIFT , Trusted service provide to major utility companies.
 Gas distribution companies, telecommunication &
cellular companies.
 Also provides exclusives item processing services to
large corporations.
 NIFT provide solution to support cash collection,
payment by cheque and payment through internet Utility
Payment Services.
3.Utility Payment Services

14. Components of NIFT
 NIFT commenced its ACH (Automated clearing house)
 operation in 1996 , after signing an agreement with
state bank of Pakistan.
 ACH system is computer based clearing and settlement
facility for interchange of electronic debit and credit
among financial institutions.
4.Clearing Services

15. • Clearing Services
Waheed ul Asar

16. Clearing Services
 Clearing Services Overnight clearing Overnight clearing
included return cheque processing
 Same day / high value clearing Same day / high value
clearing included return cheque processing
 Inter City clearing Inter city clearing included return
cheque processing
 Countrywide Local US Dollar Clearing Countrywide
Local US $ Dollar clearing included return cheque
processing.

17. Clearing Services offered by NIFT
 Clearing Services offered by NIFT Inter-bank Clearing and
settlement
 Intra-bank Clearing and settlement
 Advices for intra-bank and inter-bank Accounting
 Direct posting support on media for -returns and inward Query
systems - Software and data enabling large member banks to
organize internal
 Call centers
 Reports and Statistics to member banks on a regular basis NET
for Central Bank settlement.
 Composite Net for all Clearing Services.
 Web based inward clearing reports and net position.
 Score Board showing net positions as the day progress

18. Clearing The process
Saqib Yousaf

19. Clearing The process
• The process by which cheque exchanged between the
collecting and paying bank and the ensuring financial
settlement as called clearing. o
Clearing is of two types:
 Inward clearing
 Outward clearing

20. Inward Clearing
• “Inward Clearing “ Inward clearing means the cheques
received by the bank from other banks”
These - Inward clearing cheques are the cheques
drawn by the bank/branch customers on their account
infavour of other parties.
When cheque drafts, etc, of our branch presented to us for
clearing by the SBP is called inward clearing.

21. Inward Clearing
 Inward Clearing: The inward clearing process
decreases the deposits of the bank.

22. Outward Clearing
• Outward Clearing “ Outward clearing means the cheques
sent for collection”
Or
“The cheque of other banks ,which the account holder
deposit in their account”
The outward clearing increases the deposits of the bank”

23. Outward Clearing
Example:
A cheque drawn on “HBL" deposited in “MCB Bank" is
an outward cheque for MCB and is an inward cheque
for HBL.

24. Outward cheques could be of 3 types
 Local cheques
(within the same geographical/ clearing zone)
 Outstation cheques
(drawn on a bank outside the local clearing zone)
 Foreign cheques
(drawn on a bank/ location outside the country of the
collecting bank)

25. Difference between inward and outward
clearing
Difference between inward and outward clearing
In inward we are the paying banks whereas in
outward we are the collecting bank on behalf of
the customers & will launch the instrument in
clearing.

26. Role of Nift in Clearing
Operation
 Mirza Rustam Ali

27. Role of Nift in Clearing Operation
Role of NIFT All clearing items routed through NIFT
The main changes are:
 .Creation of direct relationship with each branch and
dispensing with the role of the central branch at multi-
branch-banks .
 .NIFT collects the outward clearing directly from each &
every branch and arranges processing, presentment and
processing of returns, providing the net position to the
central bank and necessary scrolls, reports and advices
for accounting entries to all banks and their branches

28. • The Clearing Process By NIFT

29. Receiving of Cheques and sending them to NIFT/
Outward Clearing
 At the front office the cheque are received the cheque
are then stamped with the clearing stamp.
 The amount of cheque is then posted in the system i.e
credit in the customer’s account.
 Next the clearing cheques and other instruments are
endorsed by the bank through the signatures of an
authorized signatory.
 The cheque and the deposit slips are then separated
and the clearing instruments are prepared in bundles.
 Each bundle of clearing instruments is add listed and
counted and sent to NIFT.

30. Procedure at the NFIT
 The instruments received from each bank are then
passed through a scanner
 Preparation of a Slips which contains the amount and
number of all the instruments received from a bank.
 Cheques are separated and are bundled according to
their respective branches.
 The main branch account will be Cr or Dr by the net
difference.

31. Inward Clearing

Inward Clearing Cheques received by the bank from
other banks.
 Cheques drawn by the bank customers on their account
in favor of other parties.
 On Receipt :
 Net Settlement Procedure Credit - Debit

32. Advantages to bank!!!
 Central repository
 Sound management
 Cuts cost
 Shorter cycle
 Saves employees’ efforts
 No loss of cash
 Convenient

33. Advantages to Customer!!!
 Short cycle Responsive Safety Simplicity

34. Thank you
Any Question