How long a cheque takes to clear in Pakistan: same day, next day, the cut-off

A row between Fawad Chaudhry and Punjab Information Minister Azma Bokhari over the clearing date printed on a cheque has pushed a fairly dull banking question into the trends list. Bokhari's answer was that a normal cheque in Pakistan clears the next day and that this is standard procedure. That is right, as far as it goes. The full picture has three cycles, not one.

The three ways a cheque clears

Normal clearing: next working day. You deposit the cheque at your branch, it goes to NIFT (National Institutional Facilitation Technologies), the image is presented to the paying bank, and the funds are in your account the following working day. This is the default and it is what most people mean by cheque clearing.

Same-day clearing: money the same afternoon. Cheques submitted into the same-day cycle are typically collected by about 10:45am and confirmed by roughly 3:30pm through the Image Based Clearing System. Until August 2022 this cycle was restricted: a minimum of Rs 100,000 and a branch within five kilometres of a NIFT or State Bank office. The State Bank removed both restrictions in a letter dated 24 August 2022, so a branch can now submit a cheque of any amount into the same-day cycle. Whether your branch actually offers it is a separate question. Ask.

Intercity clearing: longer. A cheque drawn on a bank in another city takes an extra day or more depending on the city pair and the bank's cut-off.

The cut-off is the part people get wrong

Every bank publishes its own counter cut-off for each cycle, and it is earlier than the branch's closing time. Deposit a cheque after the cut-off and it enters the next day's cycle, which means the clearing date printed on the slip moves a day even though nothing was wrong with the cheque. On a Friday, with the shortened banking day, that gap is wider. A cheque deposited late on a Friday afternoon can show a clearing date of Monday.

That is the ordinary explanation for a clearing date that looks a day or two later than the deposit date, and it applies to a Rs 5,000 cheque and a Rs 27.5 million cheque alike.

What a clearing date does and does not prove

A clearing date on a deposit slip tells you when the funds moved between the two banks. It does not tell you when the cheque was written, when it was handed over, or whether the account held the money on the earlier date. Those are separate records: the cheque itself, the account statement, and the paying bank's debit entry.

It also does not tell you the cheque cleared. A slip is issued on deposit. A bounced cheque is returned afterwards, with a return memo giving the reason, and dishonour for insufficient funds is a criminal offence under section 489-F of the Pakistan Penal Code.

Practical rules for your own cheques

1. Deposit before the branch cut-off, not before closing time. Ask your branch for the exact time.
2. For anything urgent, ask for the same-day cycle by name. Since 2022 there is no minimum amount.
3. For a payment you need on a fixed date, a raast or IBFT transfer settles instantly and costs nothing on most accounts, which is why cheques are increasingly used for record rather than for speed.
4. Keep the deposit slip. It is your evidence of the date of presentation.

For what a bank can charge you on cash and transfers, see our cash withdrawal tax calculator.