SBP Begins Image-Only Cheque Clearing from October 15

KARACHI: Pakistan's central bank will start clearing cheques from scanned images instead of paper from Oct. 15. It aims to end the physical movement of cheques between banks nationwide by April 30, 2027.

The State Bank of Pakistan (SBP) announced the Pakistan Express Clearing System (PECS) on Monday. It said the system would strengthen the country's digital payments network and speed up cheque clearing and settlement.

PECS runs on cheque truncation, and the idea is simple: the paper stops at the first branch. That bank scans the cheque and sends the image to National Institutional Facilitation Technologies (NIFT), Pakistan's cheque clearing house, with the clearing data attached. NIFT then forwards it to the paying bank for processing. Every step after the scan uses the electronic record, not the paper.

The SBP's Digital Innovation and Settlements Department set out the timetable in a circular to all NIFT member financial institutions.

A pilot will run from Oct. 15 to Nov. 15 at a limited number of institutions, which the SBP will choose in consultation with NIFT. The clearing house and the pilot banks will review the results together and resolve any problems. NIFT will then submit a consolidated readiness report to the central bank.

The second phase runs from Nov. 16 to Dec. 31 and extends the system to all remaining clearing house members. Participating banks must operate PECS under the SBP's rules and gradually roll out truncation across their branch networks. NIFT will run one additional PECS clearing cycle each day until the end of December.

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All NIFT members must build the required infrastructure and reach full nationwide coverage by April 30, 2027, the circular said.

Each bank has to put one person in charge of PECS and keep the SBP updated on how far it has got. Training staff on truncation falls to the banks too. So does a public awareness drive, along with compliance with the relevant laws. The central bank also ruled out any disruption during the switch: clearing timelines, customer service standards and settlement obligations stay in force throughout, the circular said.

Two things are missing from the document. It gives no estimate of how much sooner money will reach customers' accounts, and it names none of the pilot banks.

A 2021 PROMISE

The move completes a transition NIFT began five years ago. In September 2021, the clearing house started rolling out an Image-Based Clearing System and said later phases would add full cheque truncation, including capture at bank branches and on mobile devices.

Pakistan's payments have shifted sharply toward digital channels. These handled 90% of retail transactions in the July–September quarter of fiscal 2026, according to SBP data. Bank branches still processed 137 million transactions worth 110 trillion rupees in the same quarter, a sign of how much money still moves across the counter.

NIFT runs 27 processing centres across the country. The SBP recently designated it a Designated Payment System Operator under the Payment Systems and Electronic Fund Transfer Act, 2007.

Cheques remain widely used in Pakistan for business payments, rent and large transactions. PECS does not phase out the cheque itself. It replaces the paper-based process behind it with an electronic one.