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.
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
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
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”
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
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