MFI Short Notes on-'Bangladesh Automated Clearing House (BACH)'

Bangladesh Automated Clearing House (BACH), the first ever electronic clearing house has started live operation in Dhaka from 7 October 2010. It has two components
1. Bangladesh Automated Cheque Processing System (BACPS) and
2. Bangladesh Electronic Funds Transfer Network (BEFTN).

Bangladesh Automated Cheque Processing System (BACPS) is the electronic cheque processing of paper based instruments, uses Cheque Imaging and Truncation (CIT) technology. The system supports both intra-regional and inter-regional clearing and is based on a centralized processing centre located in Dhaka and in designated clearing regions.
BACPS participants are all commercial banks and related Government offices.
Country wide use of MICR encoded standardized instruments. These instruments include Cheques, Drafts, Pay Orders, Dividend and Refund Warrants, etc. has been ensured. At present 15,00,000 (approx.) regular and 90,000 high value cheques and other instruments are cleared through BACPS per month.
Almost 90 percent of all the clearing instruments are now being cleared through BACH.

BEFTN is the maiden initiative for electronic (credit and debit) transfer of funds. This network facilitates the transmission of funds between the banks electronically, which makes it faster and efficient means of inter bank clearing over the existing paper based system.

BEFTN is able to handle a wide variety of credit transfer applications such as payroll, foreign and domestic remittances, social security, company dividends, retirement, expense reimbursement, bill payments, corporate payments, government tax payments, veterans’ payments, government license fees and person to person payments as well as debit transfer applications such as mortgage payments, membership dues, loan payments, insurance premiums, utility bill payments, company cash concentration, government tax payments, government licenses and fees.