Cheque Imaging and Truncation Questions and Answers


1. What is cheque imaging and truncation?

2. To what cheques does truncation apply?

3. How will Truncated Cheques be handled?

4. How does cheque imaging and truncation affect me as a customer?

5. Will I still be able to ask for copies of an old Truncated Cheque?

6. Can the copy of the image of Truncated Cheques be used as evidence in court?

7. Will the new system delay the retrieval of copies of Truncated Cheques?


1.          What is cheque imaging and truncation?

This a process whereby electronic images are taken of cheques and information relating to cheques is captured for the purpose of presentation to drawee banks and clearing.  This avoids the need to make physical presentation of the cheques to drawee banks thereby greatly improving the clearing and settlement process. These cheques are regarded as Truncated Cheques.

2.          To what cheques does truncation apply?

Initially, it will only apply to cheques below HK$20,000 and will not apply to cheques where there is suspicion of forgery or irregularity, regardless of value.

3.          How will Truncated Cheques be handled?

When customers deposit their cheques to the collecting banks, digital images of Truncated Cheques will be generated and electronic information will be captured by the collecting banks or Hong Kong Interbank Clearing Limited (¡§HKICL¡¨) for the clearing process. Truncated Cheques will then be presented to the drawee banks electronically for verification. Truncated Cheques will be retained by the collecting banks or HKICL but drawee banks are still able to examine the physical versions of Truncated Cheques to assist them in making the payment decision as and when required. The interbank processing of Truncated Cheques using newer technology will continue to be secure and reliable with no impact on the customers.

4.          How does cheque imaging and truncation affect me as a customer?

Cheque imaging and truncation are part of the cheque clearing process. There will be no change to the current practice pertaining to the writing of cheques by payers, the deposit of cheques by payees, the schedule of making funds available by banks and the returning of unpaid cheques to payees.

5.          Will I still be able to ask for copies of an old Truncated Cheque?

Customers may request the drawee banks to produce copies of Truncated Cheques. Customers may also ask the drawee banks to retrieve the originals of their paid Truncated Cheques during the industry-wide cheque retention period as approved by The Hong Kong Association of Banks (¡§HKAB¡¨) and The Hong Kong Monetary Authority (¡§HKMA¡¨). After the expiry of this period, the originals of the Truncated Cheques will be destroyed but customers will still be able to obtain copies based on the images of Truncated Cheques.

6.          Can the copy of the image of Truncated Cheques be used as evidence in court?

A mechanism approved by HKAB and HKMA is in place to ensure that the copy of the Truncated Cheque can be admitted and used as secondary evidence in court at all times.

7.          Will the new system delay the retrieval of copies of Truncated Cheques?

As Truncated Cheques are retained by the collecting banks or HKICL, industry-wide service levels have been established for the retrieval of copies of Truncated Cheques. Hence, customers should not anticipate substantially different retrieval turnaround time while dealing with different banks.

Previous Page


Copyright©Tai Sang Bank Limited 1999, All Rights Reserved. Return Main Page