The government has announced the establishment of the Payments Industry Association to oversee the governance of payment systems, as new rules are rubber-stamped to introduce a quicker cheque-clearing process.
The new association will replace the Payment Systems Task Force, which is chaired by the Office of Fair Trading (OFT). In its last initiative, the Task Force announced that industry agreement had been reached on a number of improvements to cheque clearing.
As a result, money deposited into any account will start to earn interest (in interest-bearing accounts), or will count against overdrafts, no later than two working days after the cheque is deposited.
In addition, all consumers and businesses will be able to withdraw funds deposited by cheque into current and basic bank accounts no later than four working days after the cheque is deposited.
These improvements, will take effect from November 2007. The new Payments Industry Association Board will consist of independent directors and directors from the payments industry. The independent chairman of the association will be Brian Pomeroy. The OFT will review the work of the new association.
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