What is the ECACHSI?

The Eastern Caribbean Automated Clearing House Services Incorporated (ECACHSI) is a company established by banks in the Eastern Caribbean Currency Union (ECCU) in collaboration with the Eastern Caribbean Central Bank (ECCB) to oversee the operation of the Eastern Caribbean Automated Clearing House (ECACH).

Who are the stakeholders?

The ECCB, Banks in the ECCU territories namely Anguilla, Antigua & Barbuda, Dominica, Grenada, Montserrat, St. Kitts & Nevis, Saint Lucia and St. Vincent & the Grenadines that are part of the ECCB Clearing House arrangements and the ECACHSI.

What is the ECACH and can you explain how it works?

The ECACH is an electronic network that facilitates the clearing and settlement of cheques and electronic transactions between the Banks operating in the 8 territories of the Eastern Caribbean Currency Union (ECCU).  The Central Bank- ECCB – completes the settlement process.

 

Phase 1 implements the clearing and settlement of local currency cheques within each territory of the Eastern Caribbean Currency Union and also allows for the clearing of cheques between the territories.

 

Future phases will include the clearing of USD cheques drawn on local Banks and local currency electronic funds transfers.

How does it work?

  • Cheques deposited or negotiated at a commercial Bank which are drawn on an account at another commercial bank are scanned and the images are cleared through the ECACH.
  • The images are sorted at the ECACH and sent to the respective Banks on which the cheques are drawn.
  • The agreed rules allow for large value items, that is cheques over XCD 150, 000, to be cleared and a decision taken by the receiving Bank to “Pay or Return” same day within a specified period, currently  8 am to 2:30 pm.
  • Items below the XCD 150,000 (low value items) are processed in batches by the Banks and decisions are taken upon processing.
  • Settlements for cheques cleared by 2:30 pm each day are settled same day through the Central Bank, ECCB.
  • Items cleared through the ECACH after 2:30 pm are processed on the following day.

 

 What is Cheque Image Exchange?

Cheque image Exchange is the conversion of physical cheques to electronic images and the electronic exchange of these images between banks.  In this process physical paper cheques are no longer exchanged.

 

 What is the MICR line on a cheque?

The MICR (short for Magnetic Ink Character Recognition) line, an international standard, is the series of numbers printed at the bottom of your cheque using a special font and magnetic ink which allows the information such as the cheque and account number to be read electronically. 

 

 How does the ECACH differ from the traditional cheque clearing process?

  • Traditionally, the clearing of cheques were achieved through the exchange of the physical cheques among the commercial Banks.

 

  • With the introduction of the ECACH, cheque images are now exchanged instead of the physical cheque. The physical cheque is retained at the Bank where it was deposited or negotiated.

 

  • Once a cheque has been accepted and cleared, the physical item is no longer valid and considered as replaced by the electronic image. This was accomplished through the legislation – Payment System Act, Electronic Transaction Act and Bills of Exchange Act.

 

What are some of the benefits and advantages of this service?

  • Quicker exchange / clearing of cheques between the commercial Banks. In most instances, cheque images are exchanged within a few hours on the same day as opposed to the previous practice where all cheques were exchanged the next day.

  

  • Facilitates faster exchange and settlement of large value cheques of XCD 150, 000 and over. This allows customers to receive value more quickly.

 

  • Inter- territory cheques are cleared and settled in the same time as local cheques.  Previously, it took up to 2 weeks to clear and settle these cheques

 

  • There is improved control and accuracy with the clearing and settlement process.

 

What changes customers need to be aware of?

  • Cheques will be exchanged between banks more quickly and in most instances within a few hours on the same day. Therefore, prior to making any payment by cheque, customers should ensure that adequate funds are available on their account.

 

  • All cheques should have an appropriate Magnetic Ink Character Recognition (MICR) line printed in the bottom of the cheque to facilitate accurate and timely processing. Customers should examine their current cheque books and speak to their banks to confirm whether the cheques being used comply with the agreed standard.  If the MICR on your cheque is not according to the standard, then we encourage you to have them replaced to facilitate the clearing process of your cheques.

 

  • Your physical cheques would not be returned to you.

 

Does the ECACH impact the security of my account?

No, the ECACH is governed and protected by the Payment Systems Act and the Electronic Transaction Act.  However, it is your personal responsibility to continue to monitor your account regularly.