Dhaka, Bangladesh (BBN) – The central bank of Bangladesh will launch its automated clearing house on October 7 this year aiming to facilitate the country’s overall business activities as well as boost the economy, officials said.

Under the new system, the payment will be settled using automated cheque clearing system among 1,100 branches of all 47 scheduled banks and the government in the capital Dhaka initially.

“Our traditional clearing house – Dhaka Bankers Clearing House – will be shut down for ever from October 7,” Executive Director of the Bangladesh Bank (BB) Das Gupta Asim Kumar told the Financial Express (FE), a local newspapers, on Wednesday.

He also said such payment and settlement system will help build a Digital Bangladesh by 2021.

After implementation in Dhaka, the automated process will spread to the regional clearing houses including Bangladesh Bank offices in Chittagong, Khulna, Rajshahi, Bogra, Sylhet, Barisal and Rangpur.

“We expect that the automated clearing house will be launched in our Chittagong office by the end of this year,” the executive director said, adding that infrastructural works have almost been completed in this connection.

The Bangladesh Automated Clearing House (BACH), the automated payment systems platform, has two components – the first one is Bangladesh Automated Cheque Processing Systems (BACPS) and the second Bangladesh Electronic Funds Transfer Network (BEFTN).

“We’re now working to implement the BACH fully aiming to facilitate business activities through modernizing the payment and settlement systems,” the BB executive added.

Such payment and settlement system will help the banks to automate and digitize their functionalities, he said, adding that customers can use funds on t+1 instead of the existing t+2 as per the new payment system.

The central bank will not accept any Non-Magnetic Ink Character Recognition (MICR) cheque in all its clearing houses from November 1 this year.

“Most of the commercial banks have already started issuing MICR cheque to their clients across the country in line with the BB directives,” the central bank executive noted.

However, the central bank introduced a payment system – same-day clearance of cheques – in 2003 to help the country’s business community.

Under the arrangement, any bank cheque amounting to BDT 500,000 and above will be cleared on the same day of depositing the same with the central bank.

BBN/SI/AD-17Sept10-9:25 pm (BST)