Regional Check Processing System

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Definition: Regional Check Processing System

A regional check processing centre is run by the reserve bank which expedites the clearance of check. This helps in minimising the float. When a company issues a check each day but the final settlement takes 5 days and the delay is because the transit time of check from one place to another. If each check accounts for 6000 than the company balance sheet would show 30000 less than the balance shown by the bank account. Regional check processing centre helps minimise the float and makes cash available quickly. This is particularly helpful in large cash transaction.

The regional check processing centre delivers check to the appropriate bank overnight and helps in smooth transition of the money in the economy. The RCP handles corporate checks, money orders, personal checks and others. With the advent of electronic check processing system, the process has become very reliable and fast.

For example a bank in Chennai has to collect the amount drawn on a bank in New Delhi. If the bank sends the check to New Delhi and wait till the process takes its course, it would delay the check clearing. Instead the bank in Chennai will send the check to Regional check clearing centre that handles checks of bank in New Delhi. The RCP centre will validate and clear the check on a overnight basis.


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