Cheque Clearing (CITS)

LankaPay, established two decades ago, has been pivotal in spearheading the Automated Clearing House (ACH) function in Sri Lanka. One of its groundbreaking initiatives, the Image Clearing System (Cheque Imaging and Truncation System-CITS), launched in May 2006, has significantly modernized cheque processing. By facilitating the exchange of digital cheque images among banks, CITS has revolutionized the national retail payment infrastructure, eliminating the cumbersome physical movement of cheques during clearing. This transition to image-based clearing has not only expedited the clearing process to just one working day but has also led to increased operational efficiency and cost savings for banks. Moreover, it has provided businesses with extended timeframes to submit cheques, enhancing overall convenience for banking clients.

For businesses, the implementation of CITS has brought about notable advantages. The online data submission mode allows banks to securely submit cheque images and MICR data through a Virtual Private Network (VPN) with robust encryption, ensuring data integrity and confidentiality. Furthermore, the introduction of standardized cheque templates has helped mitigate fraud risks associated with cheque issuance, offering businesses enhanced security and peace of mind in financial transactions.

Overall, LankaPay's innovative initiatives have not only modernized payment systems but have also empowered businesses with efficient, secure, and standardized cheque processing solutions.

Explore the advantages for business

  • The presence of over 2,500 bank branches in Sri Lanka ensures a robust infrastructure for faster cheque clearing.
  • Timely availability of funds enables businesses to meet their operational requirements efficiently.
  • Elimination of the probability of cheques being misplaced in transit provides businesses with greater confidence in their financial transactions.
  • The fate of a cheque is known by the following working day, offering businesses certainty in their financial dealings.
  • Extended banking hours and value-added services catered to businesses enhance convenience and accessibility.
  • Faster and more secure cheque transactions streamline financial operations and contribute to improved operational efficiencies.
  • Improved operational efficiencies within the banking system result in better customer service and a strengthened liquidity position for businesses.

How do you write a cheque?

You should

  • Issue cheques with all material data such as date, amount in figures as well as in words, payee’s name, and the necessary signature/s.
  • Use dark ink to write cheques.
  • Print the letters which shall last for a minimum of 12 years if you choose to print.
  • Refrain from issuing cheques with alterations.
  • Not circle or underline any information on the cheque.
  • Avoid folding/crumpling of cheques, so that characters coded in magnetic ink are not damaged.
  • Avoid writing, making a mark or otherwise damaging the characters coded in magnetic ink.
  • Avoid altering or erasing content on the face of the cheque.

Dishonoring of cheques

Under the CITS operations, cheques are not physically presented to the drawee bank. Hence, it is not possible to write the cheque return remark on the cheque. If a cheque cannot be paid for whatever reason the paying bank has to select and activate the appropriate cheque return code, and a Cheque Return Notification (CRN) will be provided to the customer.

Financial institutions currently signed up with CITS


Cheques typically clear within one business day from the time they reach LankaPay, which performs functions of cheque clearing house.

Yes, but will only be processed on or after the specified date.

Banks may charge fees for clearing cheques, like commission charges and other processing fees. These fees can vary from bank to bank.

It includes elements like the person who wrote it (drawer), the bank it's drawn on (drawee), who it's for (payee), the amount, the date, and the signature.

Yes, in Sri Lanka, cheques written in Sinhala, Tamil, and English languages are considered valid.

If your cheque is lost or stolen, immediately notify your bank that issued it. They can stop payment of the cheque to prevent unauthorized use.

Write the full name of the payee on the 'Pay' line. If the cheque is only for that person, cross out the word 'Bearer' and double cross the top left corner.

Yes, you can request a stop payment if the cheque hasn't been presented for clearing yet.

You may need to make a formal request from your bank.

No, only government departments can draw cheques over Rs.100Mn.

The Payment and Settlement Systems Act. No. 28 of 2005 governs electronic cheque presentment in Sri Lanka.

Yes, there are certain inherent risks associated such as returned cheques, forgery, or lost/stolen cheques.

Unlike cash or electronic payments, a cheque is a written promise to pay from one bank account to another when presented to the bank.

Cheques are typically valid for six months from the date they're issued.

The clearing system uses electronic images, the physical cheque is removed from the clearance process once you hand it over to the presenting bank.


Related products for business

Subscribe us to receive latest updates

Sign up for LankaPay's newsletter to stay informed about the latest trends, regulations, and product details delivered straight to your email.


Event Calander