Cheque Truncation - A Legal and Practical Perspective

Abstract

As clearing bankers seek ever more cost-effective methods of funds transmission the wider introduction of cheque truncation is under detailed consideration. Certain legal barriers prevent inter-bank cheque truncation at present, however, and representation must be made to the Banking Law Review Committee so that changes in legislation can be made. The Committee will find that truncation itself poses other legal and practical problems which must be overcome by the banks and by the legislators. In due course Parliament will need to balance possible statutory control of the hitherto private clearing system against an erosion of the traditional protection afforded to bank customers.