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Describe the system of processing and collecting checks through the banking system.
Solution
The banking systems involves two processes regarding the checks -> namely, the collecting
checks and processing checks.
Collecting checks: This process takes place when the customer deposits the check at the
collecting branch. The customer will deposit the check in which he holds the account. This bank
is referred to as the collecting bank and collects the check for clearing.
Processing checks: Once the checks are collected at the collecting branch, the checks have to be
sent for clearing so that the amount is deducted from the payer's bank and remitted to the
payee's bank. Once the check is sent for clearing, it takes one day for the check to be sent to the
payer's bank and have the amount of the check debited from the payer's account. Once this is
done, the same is credited to the payee's bank and finally to the payee's account. This is called
processing of checks.

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Describe the system of processing and collecting checks through the .pdf

  • 1. Describe the system of processing and collecting checks through the banking system. Solution The banking systems involves two processes regarding the checks -> namely, the collecting checks and processing checks. Collecting checks: This process takes place when the customer deposits the check at the collecting branch. The customer will deposit the check in which he holds the account. This bank is referred to as the collecting bank and collects the check for clearing. Processing checks: Once the checks are collected at the collecting branch, the checks have to be sent for clearing so that the amount is deducted from the payer's bank and remitted to the payee's bank. Once the check is sent for clearing, it takes one day for the check to be sent to the payer's bank and have the amount of the check debited from the payer's account. Once this is done, the same is credited to the payee's bank and finally to the payee's account. This is called processing of checks.