Dear Editor,
The recent response by a bank customer with regards to banks not releasing US dollar funds from US cheques deposited is so true.
In the USA, after 9/11 planes were grounded and banks could not exchange cheques for settlement in a timely manner. At that point the US Government implemented Check 21. This is a scanning system that banks (including those in Jamaica) use to electronically scan and transmit cheques for settlement.
The information is scanned on the day the banks process the cheques and settlement is provided on the next day to the depositing bank. In the event a cheque is being returned for insufficient funds, etc the depositing bank is notified electronically within five days from deposit.
Now you can see how banks benefit from the "float" on these cheques when they 'hold' the customers' funds, in many cases for over 30 days, as mentioned by a previous reader. This can result in millions of dollars in revenue for the depositing bank, depending on dollar value of cheques deposited, in what is referred to as a Cash Letter.
Chris Raymond
Retired banker
Florida
The recent response by a bank customer with regards to banks not releasing US dollar funds from US cheques deposited is so true.
In the USA, after 9/11 planes were grounded and banks could not exchange cheques for settlement in a timely manner. At that point the US Government implemented Check 21. This is a scanning system that banks (including those in Jamaica) use to electronically scan and transmit cheques for settlement.
The information is scanned on the day the banks process the cheques and settlement is provided on the next day to the depositing bank. In the event a cheque is being returned for insufficient funds, etc the depositing bank is notified electronically within five days from deposit.
Now you can see how banks benefit from the "float" on these cheques when they 'hold' the customers' funds, in many cases for over 30 days, as mentioned by a previous reader. This can result in millions of dollars in revenue for the depositing bank, depending on dollar value of cheques deposited, in what is referred to as a Cash Letter.
Chris Raymond
Retired banker
Florida