Imaged Cheque Clearing and Archive System (ICAS)

Imaged Cheque Clearing System and Archive System

The ICAS is comprised of 2 sub-systems; Imaged Cheque Clearing System (ICS) and Image Archive System (IAS). The ICS is an imaged-based cheque clearing system, while the IAS is responsible for the storage of electronic data and images.

1. Objectives of the ICAS

1.1. To shorten the cheque clearing cycle to one-day clearing nationwide (this includes the Bill for Collection which, at present, takes 3-5 working days).

1.2. To enhance the efficiency of Thailand’s cheque clearing process to meet the international standards and strengthen the competitiveness of the country.

2. BOT’s Policies in the Development of ICAS

The BOT has developed the ICAS under the policy of “One system, one clearing house, and one-day clearing”.

One system: The deployment of ICAS allows Thailand to integrate the 3 existing systems including Electronic Cheque Clearing System (ECS), Provincial Cheque Clearing System, and Bill for Collection (B/C) system into a single system; ICAS.

One clearing house: The ICAS enables nationwide cheque clearing to be made through a single point namely Electronic Clearing House (ECH) in Bangkok compared to more than 80 clearing houses operating around the country at present.

One-day clearing: The ICAS is an image-based cheque clearing system, which eliminates the need for transportation of physical cheques in the collection process, allowing one-day clearing for cheques nationwide.

3. ICAS Implementation Plan

The ICAS is scheduled to launch in Bangkok and metropolitan areas in February 2012, which account for 70% of the total cheque volume of the country, before the nationwide implementation by the year 2013. Upon the completion of ICAS implementation plan, cheque clearing in Thailand will be made through a single system and will take only 1 working day.

ICAS Implementation Plan	Time
Deployment in Bangkok and metropolitan areas	February 2012
Nationwide implementation	By 2013

4. Benefits of the ICAS

Implementation of the ICAS provides the following advantages to different sectors.

1.1. Business Sector and Cheque Depositors

1) Cheque clearing throughout the country takes only 1 working day, this also includes bill for collection which previously takes 3-5 working days.

2) Closing time for cheque collection windows may extend for approximately 1 ½ hours. At present, banks close their cheque collection windows at around 13.00 – 14.00 but by implementing the ICAS, banks may extend the closing time to around 14.30 – 15.30 or just before the banks’ closing time.

3) Fund availability is brought forward from 13.00 – 14.00 to around 12.00.

1.2. Banking Sector

1) Transportation cost for cheques is eliminated.

2) Risk of the loss of cheques during collection process is mitigated.

3) The responsibility of banks in storing data and physical cheques is reduced as the BOT provides the central data and image archive service, namely the IAS, which allows the member banks to access 24 hours every day.

4) Innovations for financial services are encouraged, for example, the service of attaching cheque images to bank statements or the automated kiosks for cheque collection that provide receipts with cheque images printed on.

1.3. The Economy

The circulation of money in business sector and the economy is boosted

5. Cheque Clearing Procedure in the ICAS

When a customer deposits a cheque at a bank, the sending bank captures both the front and the back of the cheque into cheque images as well as prepares the data related to the cheque in order to send them online to the BOT’s Electronic Clearing House (ECH). The ECH will sort the cheque images and data before sending them to the appropriate paying bank for verifications and approval of payment.

If payment for the cheque is refused, the paying bank will inform the ECH online of the return status of the cheque, the ECH will inform the sending bank accordingly. The sending bank will then return the physical cheque attached with cheque return advice to the customer.

The aforementioned cheque data and images will be stored in the ICAS to be used as evidence in legal matters and in court in place of the physical cheque.

Cheque Collection Process in the ICAS

6. Imaged Cheque Standard for ICAS

Imaged cheques cleared through the ICAS must allow the paying banks to easily check for the validity of the cheques and the drawers’ signatures. In addition, the file size must not be too large to ensure fast online transmission.

According to the BOT’s specification, each cheque that is to be cleared through the ICAS must be converted into 3 images; the first is a grayscale image of the front of the cheque, while the second and third are black & white images of both the front and the back of the cheque (see table below for more details).

Imaged Cheque Standard for ICAS

Type of Image	Front/Back	Resolution	File Format	Quantity	File Size (KB)
1. Grayscale	Front	100 dpi	JPEG	1	46.24
2. Black & White	Front and Back	200 dpi	TIFF	2	17.84
			Total	3	64.08

Remarks:

Grayscale image is used for alteration and forgery detection.
Black & white images are used for signature and endorsement verification.

Sample cheque image under the Imaged Cheque Standard for ICAS

7. Security for Cheques

Security for cheques in the ICAS comprises of two techniques; forgery prevention and alteration detection.
7.1 Forgery Prevention
Cheques must be printed on CBS1 (London Clearing Banks Paper Specification No. 1) paper with the common watermarks specified by the Bank of Thailand. The common watermarks must be at least 2 cm in both width and height, embedded and scattered in the texture of the cheques. For each cheque, at least one full-sized watermark must be clearly visible when applied to bright light in order to facilitate the collecting banks in verifying other banks’ cheques deposited by the customers.
The cheque issuing banks may add their specific watermarks along with the common watermarks for their own internal use, but the specific watermarks must not interfere with the common watermarks’ visibility.

Common Watermark
(Visible when applied to bright light)

7.2 Alteration Detection

       1) The cheque-printing paper must be CBS1 with laser grade i.e. CBS1 paper specially coated for toner adhesion, which enables the detection of scraping, peeling, erasing, and editing of data printed from laser printers by leaving apparent traces.
       2) Data and patterns on each cheque are printed with a special type of ink.
       3) Cheques are specially designed.

8. Data Security and Integrity in the ICAS

Hashing ^1/ (also known as digital fingerprinting) and digital signature ^2/ are applied in the ICAS to ensure end-to-end data integrity control and non-repudiation of sending banks. In addition, there are other security and integrity measures in the ICAS such as authentication, rights management, transaction and traffic logs, and business continuity planning and disaster recovery.

Remarks:

^1/ Hashing is a process of converting input message, through hash function, into a fixed size string called hash value. The hash function must be 1) easy to calculate 2) difficult to recalculate the input message from the hash value and 3) difficult for different input messages to result in the same hash value.

^2/ Digital signature is used for data integrity verification as well as affirmation that the particular transaction is made by the owner of the signature.

9. Laws Related to the ICAS

The following laws support the use of the ICAS:

9.1 The Civil and Commercial Code Book 3 Specific Contracts, Title 21 Bills, Chapter 4 Cheques, Section 987-1000, which specifies the conditions and methods for drawing cheques correctly as well as validity of cheques which is a civil matter.

9.2 The Offence Arising from the Use of Cheque Act B.E. 2534, which is aimed to ensure that cheques are drawn in good faith. Drawing of fraudulent cheques will result in criminal punishments, in which penalties are clearly defined.

9.3 Electronic Transactions Act B.E. 2544 and Electronic Translations Act (No. 2) B.E. 2551, which specify that the electronic data and documents shall be accepted as evidence in legal proceedings. The acts support the ICAS without the need for revisions.

10. Requests to Cheque Drawers

To ensure efficient cheque clearing in the ICAS, the BOT would like to make the following requests to cheque drawers.

10.1 The date boxes should be filled in numerical format according to the advice on the cheques (i.e. ddmmyyyy) to allow the sending and paying banks to use optical character recognition system to read and convert the images into data for further operations.

10.2 The use of seals/embossed seals/coloured seals as parts of conditions for cheque payments should be discontinued as grayscale and black & white images are used in the ICAS. Thus, paying banks will not be able to verify the convexities and colours of the seals. In addition, the dark-shaded seals may interfere with the drawers’ signatures and essences of the cheques causing the cheques to be unverifiable.

Sample cheque images with coloured seal, which cannot be verified in the ICAS

(Original Cheque)

(Grayscale Image in the ICAS)

Sample cheque images with seals, which interfere with the signature and essences of the cheque

(Grayscale Image in the ICAS)

(Black & White Image in the ICAS)

Imaged Cheque Clearing System and Archive System​​

Imaged Cheque Clearing System and Archive System