LankaClear – first in South Asia to launch online transfer mode for CITS
View(s):LankaClear (Pvt) Ltd, the operator of Sri Lanka’s National Payment Network – LankaPay, is completely automating the cheque clearing cycle by introducing the online transfer mode of the Cheque Imaging and Truncation System (CITS).
With this revolutionary initiative, Sri Lanka is the first in South Asia to launch the Online Transfer Mode of CITS, which replaced the current inefficient practice of transferring the last mile of cheque images via CD-ROMs, LankaClear said in a media statement.
The institution launched the Cheque Imaging and Truncation System (CITS) in 2006, which transformed the domestic interbank cheque clearing process by eliminating the cumbersome physical presentation of the cheque, saving a significant amount of time and bringing down the processing costs substantially.
Although the introduction of CITS eliminated the inefficiencies associated with physical presentation of cheques, the banks still had to submit the MICR data of physical cheques saved onto CD-ROMs and deliver to LankaClear, daily. This process was found to be ineffective due to numerous practical issues encountered in delivering the CD-ROMs before the assigned cut off times and security vulnerabilities due to possibilities of the CD ROMs being damaged while transportation. .
With the launch of the Online Transfer Mode of CITS, banks are now able to transmit the MICR data of physical cheques via direct online transfer mode to LankaClear through a secured Virtual Private Network (VPN) with end to end encryption. This will be comparatively cost effective to the banks and will also eliminate the hassle of having to deliver the MICR data physically to LankaClear.