Introduction to Post Dated Cheques

The purpose of this document is to explain the functionality of Post-Dated Cheques (PDC). The content and the operational procedure explained in this guide are specific to cover the business and parameter set up for PDC processing and don’t cover the technical aspects of PDC such as the routines.

Post-Dated Cheques (PDC) are the payments received from customers in the form of a cheque with a future due date for the realisation of the cash proceeds.

• Used as an alternative for loan repayment instead of Electronic Clearing Scheme (ECS).
• Bank maintains the record of all the received cheques. On the specified date, the cheques are presented for clearance.
• Banks collect the proceeds and send the information. Upon receiving the information, the accounting entries passed in the books of account and customer dues are cleared.

The current market trend is that the post-dated cheques (PDC) have become the most accepted form of payment. An increase in the acceptance of post-dated cheques has led to warehousing issues (tracking and monitoring). The financial institution finds it hard to keep efficient tracking on the cheques received, presentation of cheques for clearing on due dates, and logical storage of post-dated cheques. Therefore, there is a need to manage these operational hazards effectively. The challenge is to take care of warehousing support for easy management and retrieval of physical cheques, track the due dates, and present the cheques collected on due dates. The core banking solutions have become more robust in terms of transaction processing these days. It is now possible to process PDC transactions through multiple modes like fund transfer and teller.

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