The State Bank of Pakistan (SBP) will begin a pilot of its new Pakistan Express Clearing System (PECS) from October 15, 2026. The system will replace the physical movement of cheques during clearing with electronic images.
According to SBP, the new system aims to make cheque clearing and settlement more efficient. It will also support the development of Pakistan’s digital payments infrastructure.
PECS Pilot Phase Begins October 15
Under the new system, the presenting or collecting bank will capture an image of the cheque. It will then send the image electronically to the National Institutional Facilitation Technologies Limited (NIFT).
NIFT will forward the image and related clearing information to the paying or drawing bank. The paying bank will then process the cheque using the electronic image instead of waiting for the physical cheque.
According to the SBP implementation plan, the initial pilot phase will run from October 15 to November 15, 2026. During this period, PECS will operate at selected clearinghouse participating institutions chosen by SBP in consultation with NIFT.
After the pilot, participating institutions and the clearinghouse will review the results. They will identify operational issues and make the required improvements. NIFT will then submit a consolidated readiness report to SBP before the next stage.
From November 16 to December 31, 2026, the system will expand to the remaining participating institutions. Banks and other financial institutions will gradually introduce electronic cheque truncation across their branch networks.
How Electronic Cheque Clearing Will Work
PECS uses the concept of cheque truncation. Under this process, the physical cheque does not need to travel between banks for clearing. Instead, banks use its electronic image and related data for processing.
The physical cheque will remain with the presenting institution. Meanwhile, its electronic image will move through the clearing system.
If the paying institution has concerns about the cheque or its image, it can request the physical instrument through the prescribed process.
SBP has also directed financial institutions to train relevant staff and create public awareness about the new system. In addition, participating institutions must follow applicable laws and regulations.
These include the Payment Systems and Electronic Fund Transfers Act, 2007, and the Negotiable Instruments Act, 1881.
Nationwide Rollout Planned for April 2027
During the implementation period, an additional PECS clearing cycle will operate daily from October 15 through December 31. The clearinghouse will be required to submit the cycle to SBP by 3pm.
The central bank has set April 30, 2027 as the deadline for nationwide implementation. All NIFT member institutions will need to develop the required infrastructure and gradually introduce the system across their networks.
Overall, SBP electronic cheque clearing is designed to reduce reliance on the physical transportation of cheques. As a result, the system is expected to streamline Pakistan’s existing cheque clearing process and support the country’s wider shift toward digital payments.
