Cheque Clearing (CITS)
Bringing Sri Lanka’s national payment infrastructure on par with international players.
Bringing Sri Lanka’s national payment infrastructure on par with international players.
The Image Clearing System (Cheque Imaging and Truncation System-CITS) was launched in May 2006, fundamentally transforming cheque processing by enabling digital images of cheques to be exchanged between banks strengthen the national retail payment infrastructure. This process eliminated the actual cheque movement in cheque clearing and reduced the delays associated with the movement of cheques. This in turn increases efficiency, reduces operational costs, and expedites the clearing process across the nation. CITS handles all the domestic interbank rupee cheque and draft clearings in the country.
CITS Operating under the provisions of the Payment and Settlement System Act No. 28 of 2005 that stipulates procedures for automated cheque clearance, the introduction of Cheque Imaging and Truncation System revolutionized the clearing process moving from physical cheque to an image-based clearing mode. This has brought down the clearing cycle to one working day from a previous three to five-day period due to elimination of physical movement the instrument. This has also enabled the banks to save time and processing costs and offer extended time for their customers to submit cheques, which has provided greater convenience to all banking customers. With the introduction of CITS in 2006, Sri Lanka became the 1st in South Asia and 2nd in the world to have rolled out such world-class payment and settlement infrastructure to enable nationwide cheque clearance.
Further, Sri Lanka is the 1st country in South Asia to launch the Online Transfer Mode of CITS, which replaced the inefficient practice of transferring the last mile of cheque images through compact discs (CDs)
Online data submission mode gives the banks the ability to submit cheque images and the MICR data of physical cheques to LankaPay via a secure Virtual Private Network (VPN) with end-to-end encryption. During the implementation of CITS a standard cheques template have been introduced in Sri Lanka to standardize cheques issued by licensed commercial banks and reduce incidence of fraud.
The Payment and Settlement Systems Act No. 28 of 2005 lays down the procedure in respect of the payment of cheques electronically presented. Section 34 (1) of the act states that the bank to whom the holder delivered a cheque for collection is permitted to issue to the holder Cheque Return Notification.
The Cheque Return Notification format has been designed to conform to all requirements set out by the CBSL. A collecting bank which has been authorized to issue CRNs shall do so in accordance with specifications given by LankaPay.
| Year | Quarter | Avg Volume of Cheques Cleared Per Day ('000) | Avg Value of Cheques Cleared Per Day (LKR) | Avg Volume of Cheques Returned Per Day ('000) | Avg Value of Cheques Returned Per Day (LKR) | Total Volume of Cheque Returned as a Percentage of Total Volume of Cheques Received for Clearing |
|---|---|---|---|---|---|---|
| 2021 | Q1 | 160 | 37 Billion | 4.0 | 660 Million | 2.5 |
| Q2 | 129 | 32 Billion | 10.4 | 1333 Million | 8.0 | |
| Q3 | 113 | 31 Billion | 7.3 | 1010 Million | 6.4 | |
| Q4 | 146 | 38 Billion | 3.4 | 681 Million | 2.4 | |
| 2022 | Q1 | 160 | 43 Billion | 3.3 | 681 Million | 2.1 |
| Q2 | 137 | 43 Billion | 4.3 | 1028 Million | 3.2 | |
| Q3 | 117 | 37 Billion | 3.0 | 862 Million | 2.5 | |
| Q4 | 139 | 41 Billion | 3.6 | 972 Million | 2.6 | |
| 2023 | Q1 | 141 | 42 Billion | 3.9 | 1068 Million | 2.8 |
| Q2 | 143 | 44 Billion | 4.4 | 1130 Million | 3.1 | |
| Q3 | 148 | 46 Billion | 4.2 | 1049 Million | 2.8 | |
| Q4 | 149 | 44 Billion | 4.4 | 1092 Million | 3.0 | |
| 2024 | Q1 | 156 | 48 Billion | 4.2 | 1056 Million | 2.7 |
| Q2 | 159 | 50 Billion | 4.9 | 1219 Million | 2.7 | |
| Q3 | 156 | 46 Billion | 4.1 | 1024 Million | 2.6 |
We will conduct CITS operations during the specified periods.
| Clearing Session | Clearing Leg | Window Open Time | Window Close Time | Activity |
|---|---|---|---|---|
| Settlement Clearing | Outward | 10:00 a.m. | 11:30 a.m. | Submit outward return data |
| Inward | 01:15 p.m. | 09:30 a.m.(Next business day) | Download inward return data | |
| Main Clearing | Outward | 10:00 a.m. | 07:30 p.m. | Submit outward data |
| Inward | 12:00 a.m. | 09:30 a.m.(Next business day) | Download inward data |
Note : CD submission mode will only be activated in contingency situations. If such a situation arises, please notify LankaPay support beforehand to enable CD submission mode.
Cheques typically clear within one business day from the time they reach LankaPay, which performs functions of cheque clearing house.
Sri Lanka Rupee Cheques and Rupee Drafts
The length of a standard cheque is 7 inches and the width 3.5 inches.
On CITS, all cheques are transmitted as images. Therefore, the submission of cheques in different sizes is irrelevant to the check verification process.
No, only government departments can draw cheques over Rs.100Mn.
A new CRN will be issued for each return of the same check. Therefore, if a CRN is presented and subsequently returned, another CRN will be generated with a new return reason
Truncation is a process, which eliminates the movement of paper, which in turn eliminates the bottlenecks and delays associated with the movement of paper. This process results in the expeditious handling of returned items, exchange of data images with remote locations and also reduces the risks associated with the handling of the physical cheques.
LankaPay provides data submission application retrieves the latest bank branch details from the LankaPay servers. If you need a separate list, contact LankaPay Support.
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LankaPay is the national payment network of Sri Lanka which provides the central payment infrastructure to the country’s financial sector. With a mission to drive financial inclusivity and empower businesses and individuals with faster, convenient and secure payment options, making payment convenience an affordable and accessible choice for all.
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