SBP to launch Pakistan Express Clearing System

October 06, 2026 (MLN): The State Bank of Pakistan (SBP) has decided to introduce the Pakistan Express Clearing System (PECS), under which cheques will be cleared on the basis of captured images instead of physical instruments, with the pilot phase starting on October 15, 2026 and nationwide coverage to be completed by April 30, 2027.

In a circular issued to all clearinghouse (NIFT) members, the central bank said the new system aims to strengthen Pakistan's digital payments ecosystem and improve the efficiency of the existing cheque clearing and settlement mechanism.

It is built on the concept of cheque truncation, as defined in Section 2(zl) of the Payment Systems and Electronic Fund Transfers Act, 2007.

Under the process, the presenting or collecting bank will capture the cheque image and send it to the clearinghouse, which will pass it on to the paying or drawing bank for processing.

The rollout will take place in three stages, as per the implementation plan attached at Annexure-A:

In the first phase, PECS will be implemented at selected participating institutions designated by SBP in consultation with the clearinghouse.

The clearinghouse and the institutions will then jointly review the pilot outcomes, address any issues and submit a consolidated readiness report to SBP.

In the second phase, the system will be extended to the remaining participating institutions, which will operate PECS under the prescribed rules and gradually widen truncation capability across their branch networks.

In the final phase, all participating institutions are required to build the infrastructure needed under the clearinghouse's requirements and achieve nationwide implementation.

Each participating institution has been asked to nominate a focal person for PECS implementation and report progress to SBP.

They must also ensure compliance with prescribed clearing timelines, customer service standards and settlement obligations, without disruption during the transition.

During the pilot phase, from October 15 to December 31, 2026, an additional PECS clearing cycle will run daily, and the clearinghouse will submit it to SBP by 3:00pm.

The PECS Rules and the Procedures and Operational Instructions for implementing the system have been enclosed with the circular as Annexure-B and Annexure-C, respectively.

SBP has also directed all financial institutions to raise public awareness of PECS through print, electronic and social media, and to train relevant staff on the truncation process.

The institutions must comply with all applicable laws and regulations, including the PS&EFT Act, 2007 and the Negotiable Instruments Act, 1881.

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