Why in 2018 does it take a week to clear a local cheque? I made a deposit of two Butterfield cheques from my own account to the Scotia ATM at the Airport Foster’s (they no longer have a convenient ATM on Seven Mile Beach) on Monday morning. On Wednesday morning the funds were removed from my Butterfield account. I went to pay some bills on Friday from my Scotia account and there was a hold on the funds. That hold remained in place until midday the following Monday.
I can send money within minutes around the world. Why does it take so long to clear a local cheque?
Auntie’s answer: Yes, it does defy belief that while you can, for example, instantly video chat with someone on the other side of the planet, banks across the street from each other need days to clear a cheque. But, yet, that’s our reality, at least for now.
I asked your question of a local bank official who explained that Cayman uses a manual exchange for clearing and settlement of paper cheques between banks. Before you throw up your hands and start yelling out loud, that situation is going to change, thanks to the Automated Clearing House (ACH), which was established in 2017 to provide an electronic payment network in Cayman.
Some people may already be utilising electronic funds transfer (EFT) between banks, via their online accounts, that is provided through the ACH that enables the transfer of money from your account in one of Cayman’s six retail banks to an account in any of the other banks.
“This process is faster, more secure and convenient, and provides the ability to transfer and settle funds locally within the same day subject to the exchange timeline of your financial institution,” the banking official explained.
Back to your question, the second phase of ACH, an electronic cheque image exchange, is in the works which “will increase the speed of the cheque-clearing process”, the official said.
While it is expected this new service will be launched this year, there is no set date yet, and it is also not clear by how much the process to clear a local cheque will be shortened.
For now, to avoid waiting for clearance I would suggest, if it is feasible, for you to ask the person writing you a cheque to transfer the money directly to your account online using the EFT service. That would be the fastest method for you to get the money, except for the old-fashioned way of someone simply handing you the cash.
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