SBP sets a pilot to clear cheques from images, with nationwide cover due by April 2027
The central bank's Pakistan Express Clearing System lets banks clear cheques from scanned images instead of moving paper. The pilot was scheduled to begin on 15 October.
The State Bank of Pakistan is moving cheque clearing from paper to images. A pilot of the new system was due to begin on 15 October, and every participating institution must be on it by 30 April 2027.
The Pakistan Express Clearing System, or PECS, is built on cheque truncation, a method defined in the Payment Systems and Electronic Fund Transfers Act, 2007. Instead of a paper cheque travelling between banks, the bank that receives it captures an image, and the later steps of clearing use that image and its clearing data. Today a paper cheque has to travel between the banks involved before it can be paid; under truncation only the image and its data make that trip. The State Bank set out the plan in a circular reported on 6 October.
How a cheque moves
The presenting bank, the one where the customer deposits the cheque, captures the image and sends it to the clearinghouse, National Institutional Facilitation Technologies Limited, known as NIFT. NIFT passes the image to the paying bank, which decides whether to pay or reject the cheque. The physical cheque stays with the presenting institution until the clearinghouse collects it.
A paying bank that doubts the cheque's authenticity or the contents of the image can mark it "Defer for Physical", which sends it back to the paper route for checking.
Banks have two ways to capture images. Under branch capture, the main mode, a compliant scanner at the branch or at a nearby designated branch scans the cheque and sends the image through the clearinghouse system. Under bureau capture, a fallback for branches that cannot do this, NIFT collects and scans the cheques itself and sends the images to the paying institution.
Three stages to 2027
From 15 October to 15 November, a limited number of institutions chosen by the State Bank with NIFT run the system. The clearinghouse reviews the results and sends a consolidated readiness report to the central bank. From 16 November to 31 December, the system extends to all remaining participating institutions, which roll out truncation across their branch networks.
During the pilot, an additional PECS clearing cycle runs every day from 15 October to 31 December, and the clearinghouse submits it to the State Bank by 3 pm. Each institution must name focal persons for PECS and report its progress to the central bank. By 30 April 2027, every participating institution must have completed implementation nationwide.
