Banks have been given a year to ensure their systems can cope with faster cheque clearing, after the government rubber-stamped new rules to speed up the clearing process.
The announcement was made alongside the launch last week of a new body to oversee the governance of payment systems. The Payments Industry Association will replace the Payment Systems Task Force, which is chaired by the Office of Fair Trading.
In its last initiative, the Payment Systems Task Force announced that industry agreement had been reached on a number of improvements to cheque clearing.
The changes mean that money deposited into any account will start to earn interest, 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.
The changes will take effect from November next year, giving the banks 12 months to review their back office systems and ensure they can accommodate the move.
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