SBP to Introduce Express Clearing System for Faster Cheque Processing

The State Bank of Pakistan announced the launch of Pakistan Express Clearing System (PECS) for reinforcing the digital payments ecosystem and enhancing the efficiency of the existing cheque clearing and settlements mechanism.

The new system will be based on the concept of cheque truncation under which cheques will be cleared on the basis of images captured, instead of physical instruments, and all subsequent steps in the clearing process are performed using the electronic image and associated clearing data, according to a circular issued by the Digital Innovation and Settlements Department of the central bank.

The implementation of PECS shall start from October 15, 2026, initially on pilot basis with a limited scope and limited participants and will gradually be expanded to nationwide coverage by April 30, 2027.

Under the new system, the Presenting or Collecting bank will capture images of cheque or other instrument and transmit the image to the Clearing House (NIFT) for onward transmission to the Paying or Drawing bank for processing the cheque or the instrument.

The PECS implementation plan, Rules, and Procedures and Operational Instructions had been circulated to all Clearinghouse (NIFT) member financial institutions (FIs), directing them to take adequate measures for training of the relevant staff on the overall process of Truncation, ensuring compliance with all relevant laws and regulations and creating mass awareness about PECS.

As per the Implementation Plan, PECS will be implemented in the initial pilot phase from October 15 to November 15, 2026, at selected Clearing house participating institutions designated by SBP in consultation with the Clearing house. The Clearing house and the participating institutions will jointly review outcomes of the pilot phase and address any related issues while the Clearing house shall submit a consolidated readiness report to SBP.

Incorporating the learnings from the initial testing, the second phase will begin from November 16 to December 31, 2026, with extension of the system to the remaining Clearing house members. All participating institutions shall operate PECS in accordance with the prescribed Rules and shall progressively extend truncation capability across their branch networks.

During the pilot phase, from October 15 to December 31, 2026, an additional PECS clearing cycle shall be operated daily, which the Clearing house shall submit to SBP by 3:00 pm.

The complete roll out of PECS is planned by end April 2027, requiring all NIFT members to develop the required infrastructure as per the requirements of the clearing house and achieve nationwide implementation of the PECS by April 30, 2027, the circular outlined.

Relevant FIs will nominate a focal person for PECS implementation and report implementation progress to SBP, besides ensuring compliance with the prescribed clearing timelines, customer service standards and settlement obligations throughout the implementation process without disruption, it concluded.