Palestine Monetary Authority Announces the Operation of the Electronic Clearance System

January 19, 2021 - Palestine Monetary Authority has announced that it had begun to operate the electronic clearance system after all necessary procedures, arrangements and checks had been completed, and had ensured that the banking system was ready for this transformation.

Through special systems and interfaces and connectivity through secure local networks, cheque images and information will be exchanged electronically, as an alternative to the exchange of the original paper cheques, for the purposes of implementing the process of clearance between banks operating in Palestine, and collecting them for the benefit of clients.

His Excellency the Governor of Palestine Monetary Authority Dr. Feras Milhem said that the electronic clearance system, which was a paradigm shift in banking, came as part of Palestine Monetary Authority's ongoing efforts to develop the infrastructure of the banking system through the development of many systems, programs and banking services, and move to a sophisticated and secure electronic working environment in order to keep pace with the latest global banking developments in the field of payment and settlement systems.

Dr. Milhem added that by moving from the current automated clearance system to the electronic clearance system, the pace of money turnover and cash flow in the local economy would increase, reflecting positively on the national economy, banks and citizens alike, and enhancing confidence in the cheque as a payment tool.

Gradually reducing the clearance period to a "T+1" working day or less will reduce the floating money period.

It is worth mentioning that the new system will allow the value of the cheque to be entered in the beneficiary's account as soon as it is submitted to the bank and up to the next working day without having to wait 3-5 working days in accordance with the system that has been previously in place, which requires more attention from the issuers of the cheques to provide the balances required in their accounts to cover the value of the cheques on their due dates as a result of the automation of the working environment of the systems of clearance of cheques and banks including direct entry in accounts and electronic return.

Palestine Monetary Authority stressed the importance of replacing paper cheque books that do not carry new security signs, in addition to the need to deposit all cheques held by citizens in banks in order to avoid the length of the collection of these cheques or the need to cash them directly from the bank issuing the cheques.