1. RULES FOR THE BANKS' CLEARINGHOUSE
PART A GENERAL
This policy notice is established under Section 9C and Section 38 of the Reserve Bank of Fiji Act rev 1995 to formally establish the terms and conditions applicable to the use of the Clearinghouse and provide a legal foundation for the Clearinghouse in conformity with international standards. The notice supersedes all previous rules, including Sections 1-5 of the Record of Banking Arrangements Between Banks, 2nd Edition, 1997, parts of which have been represented in this policy notice. The notice takes effect from 1 July 2002.
A1.2 Background and Outline of Approach
The Reserve Bank of Fiji ("the RBF") provides settlement services, in support of the clearinghouse for Fiji's payment system operated by the Association of Banks in Fiji (ABIF). The current venue for the daily exchange of cheques is located at the main branch of the Australia and New Zealand Banking Group Limited (ANZ) in Suva. These rules are aimed towards modernising Fiji's payments system to achieve compliance with the Core Principles for Systematically Important Payment Systems set out by the Basle Committee on Payment and Settlement Systems. The rules focus only on the operational aspects of the clearinghouse. Risk management measures, including a requirement for providing collateral for overnight liquidity are addressed in as a separate notice. Definitions applicable under this Notice are contained in Appendix 1.
The members of the clearinghouse are:
(a) Australia and New Zealand Banking Group Limited
(b) Bank of Baroda
(c) Habib Bank Limited
(d) Colonial National Bank
(e) NBF Asset Management Bank
(f) Westpac Banking Corporation, and
(g) Reserve Bank of Fiji (RBF)
Additional financial institutions may use the clearinghouse after applying for and approved for membership under paragraph A4.0 below.
A3.0 Designation as a Bank
The RBF shall determine whether any institution may be licensed as a "bank" in accordance with the provisions of the Banking Act 1995.
A4.0 Qualifications for Membership
A company doing "banking business" may apply for membership. Such application is to be accompanied by:
(a) a copy of their banking licence;
(b) a formal request signed by an authorised official, which includes a statement that the applicant has reviewed and intends to comply with Rules.
Upon acceptance of the application, the RBF will specify a date when the applicant may use the clearinghouse.
A5.0 Settlement Bank
The RBF is responsible for recording a daily net balance on its books of the total amounts for payments exchanged in the clearinghouse on the individual exchange settlement accounts of the participants.
A6.0 Clearinghouse Facilities
The Central Clearinghouse shall be located in Suva.
A7.0 Times of Exchange
A7.1 Normal operating hours
Exchanges may be conducted daily at all points in Fiji where clearing facilities are available at:
2:00 p.m.) Monday through Thursday; and
3:00 p.m.) Friday (or the last business day of the week)
A7.2 Holiday closing hours
If a holiday falls on a Friday and/or Friday and the following Monday, Thursday closing hour shall be extended from 3:00 p.m. to 4:00 p.m.
If there are two consecutive holidays falling on week days, the closing hour on the day before the holidays shall be extended from 3:00 p.m. to 4:00 p.m.
If a holiday falls on a weekday other than Friday, the closing hour will not be affected; banks will close at 3:00 p.m. as normal.
A7.3 Emergency Procedures
In times of emergency due to adverse conditions as may be attributable to weather, loss of power or communication, or other major disruptions in the city or country, the Emergency Procedures attached as Appendix 2 to this policy statement notice are to be applied.
In each city or town, other than Suva, where two or more branches of banks are represented, there may be established a daily exchange of payments at the same time as that in Suva. the members will appoint a branch of a bank to act on their behalf for faxing daily net settlement figures to the clearinghouse. Unless specifically noted in each case, the provisions of this Notice shall apply.
A8.1 Clearinghouse Technical Subcommittee
A Clearinghouse Technical Subcommittee consisting of one representative of each member bank, and presided over by a Chairperson appointed by the RBF shall oversee the business of the clearinghouse. The function of the subcommittee will be to enforce rules, recommend changes to rules, develop operational improvements, and perform such other duties as may be assigned to it. Recommendations of the subcommittee are then put through the formal RBF-ABIF Committee. Any changes to the rules are to be approved by the RBF before implementation.
A8.2 Clearinghouse Technical Subcommittee Meetings
The Chairperson may call a meeting of the subcommittee at any time or upon written request of at least two members. The request must specify the business to be discussed. Such a meeting must be convened within fourteen business days after the Chairperson receives a written request. A majority vote of the members present at a meeting shall decide any issue. A quorum will consist of 50% of the members represented at a meeting, in addition to the Chairperson.
A9.0 Conduct and Supervision
The daily exchange of cheques of the clearinghouse shall be conducted under the direction of a Supervision who shall be responsible for the discipline of the representatives. The Supervisor will be appointed by the ABIF.
In the event of any dispute arising between representatives of member banks when delivering or accepting payments or in connection with settlement amounts due to or from member banks, the decision of the Supervisor shall be accepted temporarily, and in the event of the dispute continuing after settlement, it shall be resolved directly between the member banks concerned.
A10.0 Modification of Rules
The terms and conditions of Rules may be modified from time to time as recommended by the Clearinghouse Technical Subcommittee to the RBF-ABIF Committee with approval by the RBF prior to implementation.
PART B RESPONSIBILITIES OF A COLLECTING BANK
B1.0 Customary Practice
Members are expected to utilise the clearinghouse to send payments to other members. Any exchange of payments other than at established clearinghouse meeting times is permitted only upon mutual and specific agreement between the clearinghouse members involved.
B2.0 Collecting Bank Provisions
B2.1 Identification of Exchanges
B2.1.1 All payments must be stamped with the name of the collecting bank and branch, on the face of each item in such form as specified by the clearinghouse and include the date of receipt, before sending such payments through the clearinghouse. If a cheque bears the stamp of more than one bank, the ownership thereof must be clearly indicated by Special endorsement . In the absence of such stamp, any cheque sent by a collecting bank purporting to bear that bank's stamp shall be deemed to bear such stamp.
B2.1.2 The crossing stamp of the collecting bank, affixed in good faith and in the ordinary course of business relieves the paying bank of the need to examine endorsements, and in the absence of the payee's endorsement, confirms that the payee's account has been credited and the collecting bank indemnifies the paying bank against such claims which may arise thereto.
B2.1.3 The guarantee implied by the crossing stamp shall be for a period of seven years from the date of payment of the cheque or other bills of exchange and all claims must be made on the collecting bank within that period. This arrangement does not apply to cheques or bills of exchange bearing special receipt forms serving both as an endorsement and a receipt. Endorsements for all items once regular and legibly written need not be confirmed. All items payable to the bank must be endorsed.
B2.2 Preparation of Exchanges
Prior to sending any payments through the clearinghouse, collecting members are to prepare the payments for delivery to paying members as follows:
(a) arrange individual bundles for each member, with subsidiary batches containing no more that 250 items each;
(b) prepare a detailed machine listing of the values of each payment included within the bundle and in the order in which they appear in the bundle;
(c) prepare the approved clearing form showing the total value and number of payments included in that bundle [a sample Exchange Clearing Form is attached as Appendix 3]; and
(d) every endeavour must be made to ensure that all items maintain established standards in relation to the paper, quality and document size. All vouchers should be presented in a uniform manner with special attention paid to remove all staple pins, other pins, clips and attachments. All items should face the same way and no items are to be folded.
B2.3 Regular Attendance
Exchanges of payments are to be delivered to the clearinghouse at or before the prescribed opening hour on each business day. One officer, duly authorised in that respect, will represent each member. A member whose representative is consistently late in arriving at the clearinghouse may not be permitted to present its own cheques for clearing (lock out by the supervisor), however it will be required to accept cheques presented by collecting banks. In these cases, the member's cheques can only be presented directly to the paying bank or held over until the next business day of clearing. Lock out is the most severe penalty to be paid for repeated tardiness. The Supervisor will give prior warning in writing to the offending member, to be followed by escalating monetary penalties as may be determined by the Clearinghouse Technical Subcommittee.
B2.4 Representation at Point of Exchange
Where two or more branches of the same bank are represented in the same town or city centre and/or in the same suburb of a town/city at which point exchanges are to be conducted, only one representative is to attend at each exchange point.
B2.5 Additional Exchanges
Where significant volumes between some banks require an additional exchange, an intermediate exchange may be arranged during the day at a time as agreed between individual members participating.
B2.6 Time Extension
Any request for extension of additional time (not to exceed 15 minutes) for delivery of information and payments under conditions specified under paragraph A7.1 of these Rules must be made 15 minutes prior to the established cut-off time.
B3.0 Prompt delivery of relevant information
Each collecting bank must report to the Fiji Dollar amount of payments it is sending through the clearinghouse on the prescribed form , which should be balanced, at or before the appointed time as noted in the above paragraph, on any business day. At the end of each settlement, each representative shall provide the Supervisor with a signed Final Settlement Statement reflecting the individual and overall net difference between the total amount of cheques sent and received.
B4.0 Debit to account in event of default
If a paying member fails to pay for any cheques delivered to it through the clearinghouse by reason of default, it must return unpaid payments in its possession to the clearinghouse on the day of the announcement of default. Sending members must except the return of such unpaid items and authorise the RBF to debit their respective exchange settlement accounts accordingly.
B5.0 Improperly prepared Exchanges
Upon receiving notice of an incorrectly prepared presentation from a paying bank (e.g. misrouted batch) (F$500,000 minimum), as provided in Part C below, collecting banks must notify the correct paying bank, adjust the totals accordingly for each bank, pick up the specified improperly prepared presentation and make a proper delivery at the time of the next exchange.
B6.0 Special Settlements
At the option of the presenting bank, cheques and settlement representing individual items for F$100,000 and over which have been accepted late for inclusion in the 2:00 p.m. exchanges are to be settled by net entry on the books of the RBF.
Special settlements are restricted to presentation at 3:15 p.m. where the closing time is 3:00 p.m. and 4:15 p.m. where the closing time is 4:00 p.m.
B6.2 Outside Suva
When the balance of the exchange settlement is F$100,000 or more or special settlement is requested of individual cheques of F$100,000 or more which have been accepted late for inclusion in the afternoon exchanges, settlement is to be effected at Suva through the banks' Suva offices with a net entry on the books of the RBF. Special settlements are restricted to presentation at 3:15 p.m. where the closing time is 3:00 p.m. and 4:15 p.m. where the closing time is 4:00 p.m.
The following procedure is to apply:
To advise by telephone followed by telex/fax immediately as follows:
"We have requested ……………… (nominated bank) to pay the sum of …………… (amount) being settlement of exchanges ………. (date) or cheque (cheque details)."
This notice is subject to confirmation by the receiving bank.
B7.0 Settlement for dishonoured Items
In accordance with paragraph C3.0 of Part C, dishonoured items are to be settled by debit voucher through the next available clearing exchange. Should a dishonoured item debit be received by a collecting bank branch before the relative dishonoured item, it is to be retained.
In such cases where such branch is unable to identify the transaction from detail appearing on the debit, the debit is to be returned to the dishonouring bank branch with the answer: "Relative items not to hand - unable to identify transaction from the information given."
In retaining debit in terms of above, a collecting bank branch shall in terms of its internal instructions, act upon the debit for purpose of notifying and debiting the party for whom the missing item was collected.
After allowing for reasonable in-transit time, the collecting bank branch must then advise the drawee bank branch of non-receipt of a dishonoured item with a view to establishing reason for non-receipt. If the dishonoured item is considered to be lost, the dishonouring bank branch should make every effort to obtain and supply the collecting bank branch with a duplicate of the lost item within 7 working days.
B8.0 Records retention
Collecting members must retain all pertinent records necessary to reconstruct any presentation or individual payment for seven years beyond the date of original presentment.
PART C RESPONSIBILITES OF A PAYING BANK
C1.0 Customary Practice
Paying banks must pick up any exchanges of payments made available to them at the clearinghouse each day. Payments made available to a paying bank which are not picked up by such bank on that day are settled on that day regardless, and the time for return will start on that day.
C2.0 Paying Bank Provisions
C2.1 Settlement or return of cheques
Payments remain the property of collecting banks until they have been settled for or returned; paying banks hold payments in trust until they have received credit from the drawer of the payment by charging that account on its books.
C2.2 Error reporting and lost cheques
A paying bank may accept the total of a collecting bank's exchanges as correct without verification. Verification of the lists is to be made by the receiving banks in their own premises. The paying bank must notify the presenting bank not later than the time of the subsequent exchange of any missing items by a Bankers' Warrant to the collecting bank. The streamer total of the exchange need not be adjusted by the paying bank at the time a missing item is located.
If the collecting bank is unable to locate the missing item, it will request the paying bank to assist in locating the missing item, in case it is held as a surplus item at the paying bank or to write to its customer seeking a replacement. The collecting bank will also write to its customer advising about the misplacement of the deposited cheque as the reason for it not being able to be processed. As a result, the item will remain uncleared until a replacement is received and processed.
C2.3 Significant errors
As provided in paragraph B5.0 of Part B, a paying bank that discovers serious errors in exchanges such as missing or unlisted batches, improperly charged batches, missing detailed listings, etc, must inform the appropriate collecting bank not later than the time of the subsequent exchange on the day of receipt and hold the specified batches for pickup by the collecting bank. The paying bank will attach the following statement to the payment(s):
Payment(s) received in error from : _________________________
Date Received : _________________________
Time Received : _________________________
Authorised Signatory : _________________________
Bank Stamp : _________________________
C2.4 Other errors
Other errors discovered by the paying bank within batches must be reported not later than the time of the subsequent exchange to the collecting bank via an advice of adjustment signed by an authorised person. Settlement for the errors will occur through the next clearing. The advice will include the following information for tracing purposes:
(a) total of the batch in which cheque is included;
(b) date of original clearing;
(c) if more than one cheque of the same amount appears in a series on the batch listing, the amounts of cheques listed immediately before and after the missing cheque should be provided; and
(d) name of sending branch, if shown on the batch listing.
In addition, the following minor errors should be handled as described below:
(a) cheques not listed but received (free) should be returned to the collecting bank without entry; and
(b) cheques which have been improperly sorted to the paying bank must be returned to the collecting bank with the answer "incorrectly cleared" through the clearinghouse not later than the close of business on the business day following the day of clearing.
C3.0 Dishonoured Payments
Unpaid or dishonoured payments are to be hand delivered directly to the collecting bank and settled for by debit through the earliest available clearinghouse meeting. Paying members must note conspicuously, in writing on each returned payment, the cause for return and where applicable, details of proof machine that appear on the reverse of the dishonoured item, i.e. machine identification, batch, or voucher number and date. In addition, an adhesive label/rubber stamp bearing a letter "R" printed must be affixed in a clear space at the top of the face of the item.
Any dishonoured cheque returned more than three times through clearinghouse channels must thereafter be presented on a collection basis. Such an item should clearly bear the letter "R" affixed by a rubber stamp three times on the face of the item.
Reasons so stated must accord fully with the Schedule of the Standardised Answers published by the ABIF and are listed below for convenience:
Effects not clear - there is not enough money in the account of the issuer of the cheque, because cheques which have been credited to that account have yet to be paid.
Payment stopped - the issuer (drawers) of the cheque has informed his or her bank not to pay the cheque i.e. stop payment.
Post-dated - the cheque cannot be paid because its date is some time in the future.
Present again - similar to above, but used when the bank expects enough money to be available to pay the cheque and therefore suggest that it be presented again for payment.
Refer to drawer - the recipient of the cheque (the payee) should ask the person issuing the cheque why it has not been paid. This would usually mean that there are not sufficient funds in the issuer's account.
Stale cheque - the cheque cannot be paid because its date is too old or "stale", normally more than 6 months.
Signature differs - there is some doubt whether the signature on the cheque is genuine.
Words or figures differ - the amount on the cheque written in words is different from the amount written in numbers. If it is unclear which amount should be paid, the cheque is returned.
C3.1 Timely Return
C3.1.1 Local clearing
Any payment presented through the clearinghouse shall be deemed to be returned timely, and the paying member shall not e held accountable for such payment, if it is returned by the second business day after the payment has passed through the clearinghouse.
C3.1.2 Intra branch clearing
Payments presented by an out-of-town branch through a local clearing arrangement must be handled in accordance with the same sequence and the same procedure above.
C3.2 Time limits for return of dishonoured items
The effect of timing on return of dishonours is to be from the day of exchange, that day being determined Business Day 1 (Working Day) and shall be:
(a) Where the item is drawn on the branch of the bank represented at the point of exchange: no later than 3:00 p.m. on Business Day 3;
(b) Where item is drawn on a point other than at the point of exchange: no later than Business Day 4; and
(c) Where the collecting bank is represented at drawee point: no later than Business Day 6 where collecting bank or collecting agent is not represented at drawee point.
All dishonours are to be hand delivered. Use of mail services for delivery is not permitted. Where return of dishonour cannot be achieved at drawee point or Collecting point for lack of representation, then the point of return is through the bank's Suva office. All dishonours are to be acknowledged upon delivery.
The drawee bank branch is to deliver dishonoured item to the collecting bank branch represented at drawee point.
Where delay is expected due to volume of transactions processed, computer delays or missorts, the collecting bank is to be advised by telephone, with details if requested, and delivery made as soon as practicable.
C3.3 Wrongly directed dishonoured item
Any dishonour wrongly directed is to be redirected without delay by the receiving bank branch to the collecting bank branch in accordance with each bank's internal instructions. Where trace details on the dishonoured items are not sufficient to identify the collecting bank branch, the item is to be returned (under telephone advice) to the drawee bank branch.
C3.4 Indecipherable or no bank stamp
Where a dishonoured item bears an indecipherable bank stamp or no bank stamp, it is to be returned through the same source as it was received with relative notice being directed to that source.
Advance notification of dishonour is required for all dishonoured payments in excess of F$30,000 by telephone, or fax notice from the paying bank to the collecting bank. The notice shall contain a) F4 amount, b) drawer's name and account number, c) date of return, d) reason for dishonour, and e) payee's name.
C5.0 Cheques inadvertently paid
Paying banks cannot automatically return a cheque after the time limit for dishonour and return. Bank branches should contact their head offices for guidance in all cases where cheques have been inadvertently paid. The only circumstance in which a paying Bank is permitted to do this transaction is where in the joint determination of the paying and collecting banks there is a fraudulent transaction between the accounts of both banks and, the collecting bank still holds funds sufficient to absorb the late dishonoured payment.
C6.0 Lost dishonoured cheques
In the case where a paying bank detects that a dishonoured cheque has been lost in transit before being finally mailed by post to a client, the paying bank must originate debit to the collecting bank upon advise of the collecting bank which includes the following information:
(a) date of clearing;
(b) amount (if the lost cheque is for a round or common amount, or if more than one cheque for the same amount appears on the batch, the amounts of the cheques listed immediately before and after the lost cheque should be provided to facilitate tracing);
(c) total of batch in which the lost cheque was included; and
(d) name of branch.
The collecting bank shall accept the debit provided that:
(a) the debit is presented not later than 7 working days from the date of original clearing;
(b) sufficient details are given; and
(c) the depositors account remains open.
Collecting banks should in all cases assist the paying bank in resolving lost cheque cases, by obtaining information from their records or a duplicate cheque from the payee.
C7.0 Situation of Default
In the event a member bank has been closed under the Banking Act 1995, such member will be declared a defaulter and shall forthwith be suspended as a member of the clearinghouse. Such bank shall not attend the clearing to either sent or receive cheques. In the event that such declaration occurs after the daily settlement, the clearinghouse will request the defaulting member to immediately return all unpaid payments from the day's clearing to the RBF. The RBF will then return such payments to the members, who had originally sent them to the clearinghouse for payment and debit their accounts accordingly.
C8.0 Records Retention
Paying members must retain detailed tapes or paper listing, and any other associated evidence necessary to reconstruct records for any clearinghouse transaction for seven calendar years from the date of receipt. Paying members will assist sending members in resolving inquiries about transactions, which will occur after the mandatory records retention period has expired.
PART D RESERVE BANK OF FIJI'S RESPONSIBILITIES
D1.0 Customary Practice
The RBF is a member of the clearinghouse and may participate in the clearing service to the same extent as any other member for payments it may receive or originate in its role as fiscal agent of the government.
D2.0 General provision
The RBF settles accounts on its books for the net positions of the members.
At the end of each clearinghouse settlement, each member bank representative shall provide the Supervisor with a signed statement reflecting the individual and overall net difference between cheques brought and cheques received, which will be the authority for the RBF to make the necessary entries on the exchange settlement accounts of the participants.
The Supervisor will then prepare the Final Settlement Statement attached as Appendix 4. When it balances, the Supervisor will declare the House to be "in balance". Member banks representatives are not permitted to leave the clearinghouse before this time.
When the clearinghouse is in balance, each representative will complete a required form to indicate that the bank's current account on the books of the RBF will either be debited or credited with the amount stated therein. This form will be signed by the Supervisor. If settlement is taking place at a branch location in another city/town at a designated clearing facility, the settlement amount will then be advised by fax to the RBF for incorporation into the consolidated clearinghouse form for that particular bank.
D4.0 Balances maintained at the RBF
Members authorise the RBF to charge to their accounts any debit amounts that may occur as a result of the day's clearing of payments, and must maintain funds in these accounts adequate to cover such debits on the day of settlement. if any member's account balance proves inadequate for this purpose, the member shall provide necessary immediately available funds no later than 4:00 p.m. Monday to Thursday and 4:30 p.m. on Friday; failure to do so will result in the declaration of default and use of the Unwind of Settlement.
D5.0 Unwind of Settlement
If the RBF discovers, during the settlement process, that a paying bank is unable to settle due to lack of funds in its exchange settlement account or has been declared a defaulter, the RBF shall direct the clearinghouse to unwind the settlement for the exchanges of that relevant day, i.e. reverse the credit given to that paying bank for its payments brought to the clearinghouse and debit against it for payments brought by other banks, and recalculate the positions of all participants accordingly. The member who fails to fund its settlement obligation as herein provided shall not be permitted to attend to the next regular clearinghouse exchange until permitted by the RBF to do so.
Any loss sharing arrangement or use of Reserve Bank borrowing to fund any shortfall in settlement balances will be governed under specific risk management measures issued by the RBF.
D6.0 Limit of Liability
The RBF shall not in any way be responsible or liable in the event a member incurs a loss in connection with participation in the clearinghouse, except in the case of the RBF's own negligence of misconduct. It is understood and agreed that all claims on account of misrouting, untimely return, failure to return, default by a member, etc, shall be resolved directly between the members except insofar as they agree to use RBF books to post the transactions. The RBF shall, however, be accountable pursuant to the terms and conditions of these Rules for its own cheques entered for clearing and settlement in the same manner as any other member.
PART E MISCELLANEOUS PROVISIONS
E1.0 Address for Notices
Any written notice to the clearinghouse as required by these Rules shall be addressed as follows:
Clearinghouse Technical Subcommittee
C/- The Executive Secretary/Treasurer
Association of Banks in Fiji
PO Box 2585
C.C.: The Supervisor, Banks' Clearinghouse, SUVA.
Any written notice between and among members required under these Rules should be addressed to designated locations specified and published from time to time by the members. Properly addressed notices shall be effective when received or at the expiration of a fixed schedule in such cases where advance knowledge is necessary.
E2.0 Governing Law
The transactions covered by these Rules shall be subject in all respects to the Reserve Bank of Fiji Act rev. 1985, the (Fiji) Banking Act 1995, the (Fiji) Bills of Exchange Act ed. 1978, the Proceeds of Crime Act 1997 and other applicable laws and regulations in Fiji. In the event that there arises any inconsistency between Rules for the Banks' Clearinghouse and the various Acts mentioned in this clause, the provisions of the relevant Act shall prevail.
E3.0 Measure of damages for failure to comply
The measure of damages for violations of Part C, to which members are subject are as follows:
E3.1 Delay in reporting
The measure of damage payable by a member that fails to report an error in its favour is an amount equal to the amount by which such member was unjustly enriched as a result of such error. However, no damages shall be payable in respect of errors less than
F$1,000,000 except where the clearinghouse determines that such occurrences are repeated or intentional. The amount of damage for unjust enrichment shall be computed by applying to the face amount of the transaction an interest rate equal to the
RBF's minimum lending rate in effect on the day the error is discovered and for such period that the enrichment was available to the member.
E3.2 Improper return
The measure of damage applicable to cases of failure to return dishonoured payments on a timely basis, shall be that the paying member becomes accountable for the cheques.
While the guiding principle of clearinghouse operations is that bank customers are not to be relieved of their normal legal liabilities in any transaction merely because the paying bank has failed to carry out all or any of these Rules relating to the handling of unpaid or lost cheques, a collecting bank may refuse to accept return of any cheque in respect of such cases where the provisions of Part D have not been followed.
In the interest of systemic stability, the RBF may choose to perform the duties of a mediator with an aim to solve any matters of dispute amicably amongst the members concerned. All disputes in respect of these Rules are to be dealt with by the banks at managerial level. Matters, which cannot be settled amicably, should be referred promptly to their respective head offices.
E5.0 Violations of law
In all other cases, the measure of damage shall be as determined under the applicable laws of Fiji.
PART F IMPLEMENTATION ARRANGEMENTS
F1.0 Application of Rules
These rules apply to all members of the Clearinghouse listed under paragraph A2.0, Part A, with effect from 1 July 2002.
2. BANKS’ CLOSING HOURS - PUBLIC HOLIDAYS
The Banks’ policy with respect to closing hours prior to public holidays are as follows:-
2.1 Public Holiday falling on a Friday and/or Friday and following Monday
The Thursday closing hour shall be extended from 3:00 p.m. to 4:00 p.m.
2.2 Two consecutive Public Holidays falling on week-days
The closing hour the day before the two consecutive public holidays shall be extended from 3:00 p.m. to 4:00 p.m.
2.3 A Public Holiday falling on week-day other than Friday
This shall not affect the closing hour of the day preceding that public holiday. Banks will close at 3:00 p.m. as normal.
3. REDEMPTION OF COINS - RESERVE BANK OF FIJI
Conditions under which Reserve Bank of Fiji will redeem circulation coins:
3.1 Reserve Bank will accept surplus coin of any denomination through the main Suva branches of banks only. Minimum lodgment will be 10 bags of any one denomination.
3.2 Copper coins - 1c & 2c must be in $100 bag lots, and cupronickel coins 5c, 10c, 20c and 50c in $200 bag lots, $1 coins in $1000 bag lots. All coins should be wrapped inside cloth bags.
3.3 Each bags must be sealed and securely tied and bear a secure label showing denomination amount and be authenticated by the bank and bear the bank’s stamp, and the date of lodgment. The label should measure not less than 4cm x 6cm on one side of the label is to be left blank for Reserve Bank use.
3.4 Any returned coin must be a genuine surplus not required by the bank for 2 - 4 months at least.
3.5 All coin received by the Reserve Bank will be accepted by it on the understanding that if it is subsequently re-issued bearing bank (branch) label, any discrepancies are to be settled between the respective banks. Such coin will not have been opened or checked in any way by the Reserve Bank. Where the Reserve Bank opens the bag on receipt or at some later date, it will also settle any discrepancy (which would include any foreign coin) at the time of checking. Any claims should always be supported by labels.
3.6 Note lodgment forms suitably amended are to be used for lodgment of coin.
4. MUTILATED COIN
This will be accepted by the Reserve Bank of Fiji on a collection basis only. Such coin must be a legal tender in Fiji and recognizable as such.
Where any large quantities arise from a single source, it would be helpful if the reason(s) for the mutilation could be stated.
4.1 Coins not received in accordance with the conditions set out above will normally be returned to the Bank concerned.
4.2 Banks receive wrapped coins which they re-issue. We ourselves will not be verifying content. We should delete underlined clause.
4.3 Rather than Reserve Bank of Fiji wasting time dating bags, let the depositing bank do it.
Our sale task at re-issue time should be the stamping of the tags with the Reserve Bank of Fiji stamp.
5. PROCEDURES FOR RBF NOTE AGENCIES AND CASH TRANSFER CONTROL
5.1 The above Note Agencies will be located
(a) in Lautoka at the ANZ Bank, Naviti Street Branch
(b) in Labasa at the National Bank, Jaduram Street Branch.
The four safes (two in each of the Agencies) are to be retained for this purpose, at no cost to the Banks.
5.2 No re-issuable notes are to be lodged at the Agencies, and Operations will be limited to:
(a) stocking with new notes withdrawn from the RBF for issue to Banks.
(b) Redemption of parcels of unserviceable notes.
5.3 The maximum value of notes:
(a) in store at the (i) Lautoka Note Agency in $3,000,000.
(ii) Labasa Note Agency is $2,000,000.
(b) in transit between the Agencies and the Reserve Bank is $2,000,000.
5.4 All costs in relation to the operations of the Agencies will be the Banks’ collective responsibility.
5.5 Banks will be responsible for appointing two senior officers of Assistant Manager and Accountant level as Custodians of the Agencies whose names and signatures are to be advised to the RBF, prior to implementation of the changes.
5.6 Regular clearing of parcels of unserviceable notes for delivery to the RBF and stocking up of new notes will be the sole responsibility of the Banks.
5.7 All transactions at the Agencies will be specifically authorised by the Reserve Bank and such authorities will be communicated to the custodians through their Suva offices and copied to the Control Bank.
5.8 i) Bank’s responsibility for the unserviceable notes ends when they have
been delivered to the RBF premises and signed for by two officers of the RBF, one of whom shall be the Chief Custodian or his alternate.
ii) For new notes Reserve Bank’s responsibility ends from the time the notes are uplifted and signed for the Bank’s/s’ representatives authorised to uplift the notes.
5.9 The RBF will continue to handle bookkeeping functions in respect of all operations at the Agencies.
5.10 Lodgments and issues of notes will be transacted once a week on Wednesday.
5.11 The Head Offices of all Banks in Suva will forward requisition and lodgment advices covering transactions at the Agencies to reach the RBF by 1:00 p.m. on Tuesdays. Transactions for all branches should be amalgamated so that the RBF receives one separate lodgment and requisition advice for each Bank.
5.12 All unserviceable notes presented to the Agencies are to be in bundles of 1000 notes consisting of 10 smaller bundles of 100 notes packed flat.
Exception - $10 and $20 may be accepted in bundles of 100 notes.
5.13 Banks wishing to lodge notes at one of the Agencies are to be so in sealed parcels of not more than 5000 notes in each parcel. Sealed parcels should contain:-
2 copies of the Certificate of Contents signed by two responsible bank officers of the Bank/s lodging notes, one of whom must be the executive officer of the branch concerned (one certificate to be in the parcel and the other pasted securely on the exterior).
5.14 Banks’ accounts will be credited on the day of the lodgments, subject to recourse in the event an error is found.
5.15 Notes will be issued in multiples of 1000 notes of any denomination, subject to availability.
5.16 All parcels lodged at the Agencies must be cleared and delivered to the RBF premises in Suva at least once every 6 weeks from Lautoka and once every 8 weeks from Labasa.
5.17 The RBF will accept the parcels at its premises only on Fridays and notices of intended delivery date of notes from the Agencies must be given to the Chief Custodian of RBF at least two clear working days before giving the following details:
(a) Make and register number/s of vehicle/s delivering the parcels.
(b) Form of identification of personnel delivering the parcels.
(c) Certificate from custodians indicating number of packages and value.
5.18 The parcels will be accepted and signed for by at least two attending RBF officers on the clear understanding that should any discrepancies be found when contents of the parcels are processed, the RBF will on notifying the Bank/s concerned, debit or credit their Exchange Settlement Accounts with the amount of the discrepancy/ies.
Estimated maximum time of clearing deposit is 20 working days from the time of lodgment at the RBF premises.
5.19 The total of all Certificates on the parcels delivered to the RBF from Lautoka and Labasa Agencies must agree by denomination and in total with the currency records held with the RBF. Any discrepancies will be so recorded on the receipt given and the custodians and the Control bank responsible at the time notified by telephone immediately and confirmed in writing soon after.
5.20 Notes will be uplifted from RBF only by personnel authorised to do so by the Control Bank. The Chief Custodian must be informed by the office of the Control Bank of the required amounts (by denomination) to be transferred to the Agencies two clear working days before the actual transaction day.
5.21 The RBF would reserve the right of access at any reasonable time by its officers or appointed agents to verify holdings at the Agencies.
5.22 The Reserve Bank will continue to provide all stationery.
5.23 Custodians are to forward a signed return of transactions and balances on hand (on the form provided) to the Reserve Bank and copied to the Control Bank after each day’s transaction.
The terms used in these Rules have the following meanings
'ABIF' shall mean the Association of banks in Fiji representing its member banks as scheduled under PART A, Clause A2.0 - Membership.
'Books' means the accounting records maintained by a member for its clients and exchange settlement accounts maintained by the RBF for members.
'Business Day' means a day from Monday to Friday (excluding gazetted public holidays).
'Clearinghouse' means the facilities maintained by the ABIF in Suva and other locations where exchange of cheques are carried out by bank branches on behalf of the ABIF.
'Collecting bank' means, with respect to any payment, the member that sends that payment through the clearinghouse to a paying bank. The terms "collecting bank" and "sending bank" may be used interchangeably in these Rules.
'Crossing Stamp' the first stamp that is placed on the face of a cheque by a bank as it is presented for payment for the first time. This indicates that the bank which has stamped the cheque has paid out on the cheque and is eligible for payment as the current holder.
'Eligible cheque' means a payment that is determined to be acceptable for clearing by the clearinghouse. This includes cheques, bankers payments, demand drafts, debits for clearing adjustments, returned cheques and incorrectly cleared cheques irrespective of domicile. Other cheques, which are not eligible for presentment through the clearinghouse, must be cleared in terms of each bank's internal instruction.
'Exchange' means a group of payments prepared and delivered to the clearinghouse in accordance with prescribed procedures.
'Member' means a bank, which has been approved to participate in the clearinghouse under the terms and conditions of these Rules. The terms "financial institutions", "bank" and "branch" may be used interchangeably in the text.
'Net Settlement' means the posting by the RBF, of a net debit or credit to the exchange settlement account of a member for the daily clearings. Such postings shall be provisional, subject to the provisions of paragraph C2.0 of Part C.
'Paying bank' means, with respect to any payment, the member that receives that payment through the clearinghouse and posts the payment to a current account. The terms "paying bank", "drawee bank", and "receiving bank" may be used interchangeably in these Rules.
'Payment' means a cheque drawn on a current account in a financial institution as defined by the Bills of Exchange Act of Fiji. The words "payment", "item", and "cheque" may be used interchangeably in these Rules.
'Payable on demand' means the delivery of a payment by a collecting bank to the clearinghouse representative of the receiving bank upon which the payment has been drawn.
'Returned cheque' means any payment, which has been dishonoured by the receiving financial institution for any reason and sent back through the clearinghouse. Payments are not considered to be finally paid until the close of the prescribed period of time for return.
'Special Settlement' means individual items for F$100,000 and over.
ABIF EMERGENCY PROCEDURES
1.0 General Provision
Conduct of daily clearing operations may be delayed within a business day or deferred to a later day in the event that members are unable to attend due to adverse conditions as may be attributable to weather, loss of power or communications, or other major disruptions in the town, city or country. In such cases, all entries applicable to the clearings or returns shall be deferred until normal conditions are restored. However, individual members should prepare for disruptions in their own facilities and are responsible for maintaining contingency plans for necessary equipment to be available to be able to continue operations for the duration of the emergency.
In the event of an emergency/industrial action arising, affected members are to contact as soon as possible, the ABIF Executive Secretary/Treasurer, or where he is not available, the ABIF Chairman, and advise the following details:
• those branches closed;
• those branches providing limited services;
• details of these services;
• details of branches which will be withdrawing from exchange/clearance of cheques; and
• those branches open and unaffected.
The ABIF Executive Secretary/Treasurer, is to collate information and advise the Chairman accordingly. The Chairman will formulate any statements, which are to be made on behalf of ABIF.
Confirmation of these statements may be, where necessary, be confirmed with individual banks. The ABIF Executive Secretary/Treasurer will advise each member of the status of all members affected.
Whilst the decision to open/close or provide limited services rests with each individual member, the following procedures will be applicable.
3.0 Maintaining Full Services
The extent to which these services can be maintained in a given situation will depend on the nature, location, and duration of the emergency or industrial action. This will be subject to prompt consideration by ABIF after determining whether all banks are similarly affected. Special advices at the time will supplement these standing instructions.
4.0 Clearing of Cheques
All members are required to accept for value from customers cheques drawn on own and other members, even-though such paper may not be able to be processed. If subsequently because of any special circumstances a member(s) decides to discontinue accepting paper for value on one or more of the members, it must notify the ABIF Executive Secretary/Treasurer in advance.
Where an ABIF member has cause to discontinue acceptance of a member's paper, consultation with the Reserve Bank of Fiji prior to implementation will take place to ensure that the impact on the financial system is minimised.
Local exchanges are to be continued for as long as possible even when one or more members are not able to exchange. All paper including credit clearings accepted by a member is to be settled daily. Cheques drawn on members represented but not conducting exchanges are to be cleared in terms of each collecting bank's internal instruction.
6.0 Dishonoured items
All bills, promissory notes, etc. should be presented to drawee banks if possible. Drawee banks will either give the collecting bank a warrant or answer "unable to process". Should presentation of a bill on due date not be possible, the bill should be presented on the first business day possible.
Where local exchanges have been discontinued by any bank/branch the time limit for return of dishonoured items as set in Part C, will be suspended until exchanges are resumed. On resumption, items should be presented on the first subsequent business day possible, without recourse.
In the event of any mail stoppage coinciding with a bank stoppage, banks or branches not serviced by a courier, or where this service has been suspended, should hold all mail addressed to branches/other banks until cleared by instructions from their administrative office.
Banks/branches services by a courier should, as far as possible, endeavour to forward inter-bank/inter-branch mail.
Individual members will have to consult with the Reserve Bank of Fiji before action involving closure is taken.
9.0 RBF-ABIF procedures during natural disasters
i) nominate a National Liaison Officer;
ii) formally advise the ABIF National Coordinator;
iii) identify channels of communication including backup systems where possible;
iv) formalise and verbal directives given to ABIF National Coordinator;
v) liase with ABIF National Coordinator for the submission of a joint report to RBF-ABIF Clearinghouse Technical Subcommittee as soon as possible after each emergency situation in which problems incurred should be identified and recommendations made on the manner in which they can be rectified; and
vi) the identification of the RBF National Liaison Officer to be reconfirmed on a quarterly basis and at the same time re-affirmation of channels of communications should be made.
i) the ABIF Executive Secretary/Treasurer will be National Coordinator;
ii) all ABIF members will nominate their own bank coordinator;
iii) formally establish ABIF National Coordinator of all appointments;
iv) establish channels of communications with RBF Liaison Officer and Bank Coordinating Officers;
v) advise all branch managers of such appointments quarterly;
vi) keep a diary of events as they occur; and
vii) immediately on receipt of directives from the RBF National Liaison Officer the ABIF Coordinator will relay information to Bank Coordinating Officers who will advise affected branches accordingly.
All Coordinating Officers will be made aware of the fact that any changes in banking operational hours regardless of the circumstances can only be authorised by the Reserve Bank of Fiji.