The exchange of cheques among local banks in the State of Kuwait is carried out through the CBK. Towards improvement of the banking work environment and banks’ operation systems and processes and automating their diverse activities, the CBK Board approved the Kuwait Electronic Cheque Clearing System (KECCS) project as an alternative to the manual system, and the new system was launched in 14 June, 2015 within the framework of implementation of safety and integrity criteria and in compliance with the laws in effect within the State of Kuwait, where international best practices were adopted in terms of automation of the cheque clearing cycle as well as conversion of cheques into electronic formats to be used in electronic clearing.
The Kuwait Electronic Cheque Clearing System (KECCS) is a system for electronic clearing of cheques in the Kuwaiti Dinar among participants (local banks). The CBK is the manager of the Electronic Cheque Clearing Center as well as a participant, acting as the bank of the Government and collecting cheques on behalf of state bodies through the CBK.
Adopting the (KECCS) system carries several benefits for the local banking system and for clients, which could be summed up in the resultant improved operational efficiency of cheque clearing so that the time required for the collection of cheques’ values and depositing of these into beneficiaries’ bank accounts now takes place within a single business day instead of three as with the previous manual system. This improves customer service and reduces systemic risk related to delayed collection, particularly since the new system provides instantaneous information and data that would lead to fast detection and identification of falsified cheques. This, in turn, increases efficiency of payment systems of the Kuwaiti economy and banks’ liquidity and bolsters the financial and monetary stability of the State of Kuwait.
The regulatory guidelines relating to the (KECCS) systems were specified and detailed within its comprehensive guidelines, binding for all participating bodies and regulating their interaction(s). The system performs the following functions for its participants:
- Collection of cheques deposited by customers of the participating body through accounts with other banks.
- Authentication of cheques in terms of meeting the unified security criteria, to ascertain they are not falsified/forgeries.
- Inquiry and search for cheques’ data through a flexible mechanism.
- Saving cheques’ copies and attachments in the system and enabling the retrieval of such at a later point in time.
- Issue of various reports and carrying out inquiries.
In addition to shouldering the operation and management of the (KECCS) system, the CBK also carries out, directly, debit and credit operations on accounts of participants of the (KASSIP) system, according to net settlement position within the KECCS system, and also monitors all participant bodies and their compliance with the rules and regulations governing the system.