Asssignment (Final Term) Name:-Faizan Saleem: Prof - Mirza Mukhtar Ahmad

ASSSIGNMENT
(FINAL TERM)
NAME:-FAIZAN SALEEM
CLASS:-M.COM (3.5 YEARS)
ROLL#286
SUBMITTED TO: PROF.MIRZA MUKHTAR

AHMAD
1
WHAT DO YOU UNDERSTAND BY
NIFT?
 NIFT STANDS FOR NATIONAL INSTITUTIONAL
FACILITATION TECHNOLOGY (NIFT).
 NIFT is a joint venture between a consortium

of six major banks and the private sector. It is
responsible for the establishment and
management of automated clearing house
facilities in Pakistan.
 NIFT is actively involved in the modernization

of payment systems in the country. All
commercial banks in Pakistan are members
of NIFT’s clearing system and Bank plays
monitoring role on the clearing operations
of NIFT.
OBJECTIVES:-
 To provide support to the financial industry in
modernization of the payment systems in
Pakistan.
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 To facilitate automated solutions in the payment
arena, (Utility Cos., Tax collection, Govt. receipts
/ payments etc., through cheques clearing
process).
When NIFT was established?

 National Institutional Facilitation Technologies
(pvt). Limited
 Incorporated in September 1995 between
1.Major six bank,which

includes
 Habib Bank Limited

 United Bank Limited
 National Bank Of Pakistan
 MCB Bank Limited
 Allied Bank limited
 First Women Bank Limited
2.Private
3
Entrepreneurs
 A licensed clearing house of Pakistan
 NIFT’S board comprises 14 directors;
 7 from banks & 7 from private sector.
What is total number of member

bank branches availing these
facilities?
 40 commercial banks and their 5571
branches in 185 major cities,20 data centers
utilize NIFT’S services.
 Established to facilitate to provide PKI

(public key infrastructure) based security
solution for e-business,e banking,e-
government.
 Provide other information security related

service to large corporation and banks
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What services NIFT offered?
The services includes:
 Cheque clearing
 Cheque truncation
 Utility payment processing
 E services
CHEQUE CLEARING
Basically what cheque clearing is:-
Cheque clearing is the process of moving a

cheque from the bank in which it was deposited
to the bank on which it was drawn, and the
movement of money in the opposite
direction.This process is called clearing cycle and
normally results in a credit to the account at the
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bank of deposit, and an equivalent debit to the
account at the bank on which it was drawn.
CHEQUE TRUNCATION
 Conversion of physical cheque into

electronic form
 Saves time and processing costs
 Central bank was done before which was
difficult as banks arrange to meet each day
 Banks and financial instituations use cheque
truncation
 The process goes through inward and
outward clearing
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Utility payment processing
 In addition to NIFT’S services to financial industry it
also provide services to utility companies
 It provides processing services to:
 Sui Southern Gas Co. and Sui Northern Pipeline
Ltd
 Telecommunication Company (PTCL)
 Karachi Electronic Supply Co
 Karachi water and sewerage Board
Clearing
 Definition
The transfer of funds from a branch of a bank to
the other bank on which the instrument is drawn,
without involving cash through “State bank’s
Clearing house.”
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Different types of clearing facilities offered by
NIFT:-
 Types of clearing
 Inward clearing
Inward clearing means cheques received by the
bank from other bank.
 Outward clearing
Outward clearing means cheques sent for
collection.
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Inward clearing process
 It means cheques received by the banks from

other banks.
 The inward clearing process decreases the
deposits of banks
 The main operational task done by banks were:
 Validation of customers account

 Validation of the physical instruments
 Archival of all physical instruments
Outward clearing
 It means cheque sent for collection
 Outward clearing process increases the deposits
of bank
For example:
 When we received inward clearing we have to
debit our customer account and when we
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receive outward clearing we have to send it to
relavent bank payment.
 Like a cheque drawn on HBL deposited on MCB
bank is an outward cheque for MCB and it is
inward for HBL.
Clearing services offered by NIFT
 Clearing services offered by NIFT inter-bank

clearing and settlement
 Intra-bank clearing and settlement
 Advices for intra-bank and intra-bank
accounting
 Direct posting support on media for returns and
inward query systems-software and data
enabling large member banks to organize
internal
 Call centers
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 Reports and statistics to member banks on a
regular basis NET for central bank settlement
 Composite Net for all clearing services.
 Web based inward clearing reports and net
position.
 Score board showing net positions as the day
progress
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Asssignment (Final Term) Name:-Faizan Saleem: Prof - Mirza Mukhtar Ahmad

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ASSSIGNMENT

CLASS:-M.COM (3.5 YEARS)

SUBMITTED TO: PROF.MIRZA MUKHTAR

 NIFT is a joint venture between a consortium

 NIFT is actively involved in the modernization

When NIFT was established?

1.Major six bank,which

 Habib Bank Limited

What is total number of member

 Established to facilitate to provide PKI

 Provide other information security related

Cheque clearing is the process of moving a

 Conversion of physical cheque into

 It means cheques received by the banks from

 The main operational task done by banks were:

 Validation of customers account

Clearing services offered by NIFT

 Clearing services offered by NIFT inter-bank

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