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CICS OM 17-007

Updated: Dec 3, 2020

18 January 2017


T 0 : All Member/Participant Banks

R E : Implementing Procedures Coverin g Direct Presentation of Returns Under Section 19 and 20 of the PCHC CICS RR


1. Further to Sections 19 and 20 of the PCHC Check Image Clearing System Rules and Regulations

(PCHC C1CS RR), we enumerate hereu nder the procedures coveri ng direct presentation of dishonored Checks that were not ret urn ed with in the Prescribed Period, to wit:

1.1 Special Clearing of Returned CICS Item of which payment has been refused due to

Technicalities other than those specified in 1.2 of this document

1.1.1 . On con sent or agreement of the Presenting Bank, Returning Drawee Bank/Branch shall:

a. Print 2 copies of Special Return Check Advice (see Annex A for the suggested format)

bearing the images of the item/s to be returned;

b. The Special Return Check Advice or SRCA must be de livered to the Presenting Bank's

Central Clearing Unit not later than 11:00 AM of same day . The SCRA and the

attendant Clearing Receipt/Charge Slip (CR/CS) should be signed/acknowledged by

the Presenting Bank; and

c. Effect settlement, by sending the CR/CS the next clearing session

1.1 .2. On other hand, the Presenting Bank shall :

a. Receive and verify the SRCA, validating the authenticity of the printed image/s against

the original check;

b. Acknowledge and sign the CRiCS as we ll as the receiving copy of the SCRA;

c. Debit the account of the depositor to reverse the entry.


1.2 Payment has been refused due to Alteration or Forged and/or Unauthorized Endorsement

and/or Counterfeit Check

1.2.1 . The Drawee Bank/Branch shall communicate to the Presenting Bank its intention to

return a check beyond the Prescribed Period due to "Forged Endorsement" and/or

"Alteration" or "Counterfeit Check" and shall perform the following:

a. Prepare a transmittal letter (see Annex B for the pro forma) addressed to the

presenting bank/branch covering the direct presentation;

b. Print Return Check Advice (SRCA) bearing the images (IRD) of the dishonored item/s

to serve as documentation;

c. Attach the affidavit of the Payee of the Check in case of Forged Endorsement and/or

affidavit of the Drawer of the Check in case of Alteration and Counterfeit Check.

d. Deliver the letter, SRCA and the attendant CR/CS to the Presenting Bank/Branch by

messenger or special courier;

e. Once the Presenting Bank acknowledges/signs the SRCA and CR/CS, effect the settlement by sending the CR/CS the next clearing session.


1.3 The Drawee Bank/Branch c1aim/s for reimbursement of the amount erroneously paid can

only be made on items within One Hundred-Eighty (180) days from the date of its clearing.


1.4 Presenting Bank/Branch is mandated to acknowledge receipt of the transmittal letter covering

the direct presentation in accordance with Section 19.3 of the C1CS RR. Additionally,

1.4.1 The representative of the presenting bank/branch who signs for the documents must be

an Authorized Signatory;

1.4.2 Presenting Bank/Branch is obliged to respond in writing to the c1aimls of the Drawee

(Returning) Bank/Branch within ten (10) clearing days from date of receipt of the

transmittal letter;

1.4.3 If Presenting Bank/Branch consents to the return by direct presentation beyond the

Prescribed Period, shall accept/sign all copies of the SRCA and deb it the account of the

depositor; otherwise, if there is refusal, sign on the portion of the letter indicating reason

for such refusal forwarding a counter affidavit/claim to the Drawee Bank/Branch.


2. If within ten (10) clearing days from date of receipt of the transmittal the Presenting Bank/Branch

fails to respond, the Drawee Bank/Branch may elevate/file a case of claim with the Arbitration

Committee.


3. The detailed procedures for the elevation to the Arbitration Committee of claims between

participating banks are covered under Section 33 of the C1CS RR.


4. Banks are enjoined to strictly observe the foregoing procedures in order to preclude sanctions or

penalties that may be imposed by PCHC should non-compliance persist. Any violation shall be

subject to penalty the amount of which shall be fixed by the PCHC Board of Directors .


5. For your guidance/compliance.




CICS OM No.17-007
.Implementing Procedure
Download IMPLEMENTING PROCEDURE • 1.05MB
CICS OM No.17-007.Annex A.SRCA
.pdf
Download PDF • 516KB
CICS OM No.17-007.Annex B
.Pro Forma Lett
Download PRO FORMA LETT • 473KB