•They were designed to provide a uniform framework for the conduct of clearing throughout
•These have been adopted individually by the general body of each clearing-house.
•These rules govern the conduct of the clearing-houses in India.
•They prescribe a fair membership criteria.
•They provide for penalties in the case of default.
•They also provide for Hours of Clearing and Return of Documents.
•They have laid down clear procedures for settlement of clearing transactions.
•The rules detail the manner payable and receivable differences should be settled.
•The rules prescribe for a minimum balance to be kept by sub members with the bank
managing the Clearing-house.
•The rules detail the penalties for defaulting in maintaining the minimum balance and the
overdraft, if any, due to adverse clearing position.
•The rules lay down the mechanism to be followed in the event of the default by a member in
meeting its clearing liabilities.
•Individual Clearing-houses are free to frame their own rules consistent with the broad
framework provided by the Regulations.
•Based on the needs of the members as also local trade and consumer associations, a clearing-
house may decide on the number of presentation clearings and corresponding return
–The clearing-house is headed by a President, who is the officer-in-charge of the bank
managing the clearing-house.
–The President is assisted by a Standing Committee comprising of a few representatives of
member banks to help him resolve urgent problems.
•The instruments presented at a clearing-house are:
These are the instruments that are deposited by customers for collection.
Types of clearing
• Outward clearing refers to instruments that are deposited by customers that are drawn on
other banks that need to be presented at clearing.
• This can be further divided to:
–Local clearing (instruments drawn on banks in that city)