Digital Cheque Clearing Explained

During the Central Bank of Barbados’ July 2024 economic review and press conference, Governor Dr. Kevin Greenidge revealed that “since October 2023, we have been working with the commercial banks on a cheque digitisation project that would reduce the time it takes them to clear local cheques. Right now, it takes anywhere between three and five days. The goal for us is to reduce that to one business day.”

Learn more about the new digital clearing system for cheques and how it will impact customers at Barbados’ commercial banks.

What is meant by the digital clearing of cheques?

“Clearing” is the term used for processing cheques to ensure that they are authentic and that the account from which they are written has enough funds to cover the value of the cheque.

Digital clearing refers to a way of processing cheques that uses a high-quality image rather than the actual cheque itself. This allows banks, who traditionally have physically met to exchange cheques, to do so electronically. 

Do people still use cheques?

Yes. While there has been an increase in the use of digital payments, many people, businesses, and other entities continue to use cheques. In 2023, the value of cheques cleared in Barbados was $11.9 billion.

What are the benefits to moving to a digital clearing system?

Using a digital clearing system will reduce the time banks take to process cheques, which means that when you deposit a cheque, you will get the money more quickly.

When is Barbados moving to a digital clearing system?

The system went into effect on August 6, 2024. However, commercial banks will still need to process some cheques manually due to print-quality and other issues. The Central Bank has asked them to work with those customers whose cheques cannot be cleared electronically over the next six months to address those issues.

Under the new digital clearing system, how soon will I get my money after I deposit a cheque?

The goal is one business-day. However, while banks have begun to use the new system, there are some cheques that cannot be cleared digitally due to print-quality and other issues. Over the next six months, commercial banks will work with their customers to address those issues, and by February 2025, all cheques should be able to be cleared within the one business-day timeframe.

Will I have to replace my cheques?

If your cheques do not meet the standard required for them to be cleared digitally, you will need to change your cheques. Your commercial bank will work with you over the next six months to complete that process.

Who will pay for my new cheques if I have to replace the ones I have now?

If your cheques are among those that have print-quality issues, you will have to cover the cost of changing them.

How long will I have to change my cheques?

You will have six months to replace your cheques. That means that by February 6, 2025, your cheques must be of a standard that will allow banks to clear them electronically.

Who should I contact if I have questions about this new system?

You should contact your commercial bank with any questions you have.