Winn Varootbangkul
Senior Analyst
Payment and Debt Instruments Department
The Imaged Cheque Clearing and Archive System (ICAS) is a system initiated by the Bank of Thailand (BOT), in which it jointly developed with the Thai Bankers Association (TBA), deploying cheque image exchange between commercial banks in place of physical cheque exchange. The law underpinning ICAS is section 12/1 of the Electronic Transactions Act, which states about the conversion of documents into electronic documents, whereby the electronic documents created under the specified rules could be presented as evidence in court.
The Guideline and Method for Document and Content Preparation and Conversion into Electronic Format has also been issued by the Electronic Transaction Commission. It specifies the requirements for the creation and conversion so as to ensure that the resulting electronic documents are legally complied.
For ICAS, a rule especially for conversion of original cheques into cheque images is also provided; encompassing from image specification, conversion process, and security measures. The main principle is that the output must be equivalent to the input, meaning an electronic document must convey the same content or format as the original document. To ensure the compliance of all rules and regulations related to section 12/1, the BOT is responsible for overseeing that the commercial banks perform in accordance with the requirements.
Laws of many countries permit the use of electronic documents converted from original documents as evidence for legal proceedings. The US takes it to another level, in which after an original cheque is captured into a set of cheque images, a ‘substitute cheque’ may be created from the data and images. A substitute cheque can be used in the same way the original would be used, as it is legally equivalent to the original cheque. The concept is suitable for a country with several thousands of banks and with various degrees of technical sophistication. What is needed for Thailand, however, is that after the conversion of physical document, the original may be disposed with impunity.
ICAS is the first major initiative enforcement of the Electronic Transactions Act. Although the initial aim is to minimise negative impacts on consumers, some changes are inevitable. The BOT and the TBA, therefore, see the need to adequately inform the public and officers involving in legal processes; it will be conducted through various channels. A seminar, which was aimed at legal sector, was held on the 30th of March 2011. More seminars are on schedule to promote understanding of the new cheque clearing processes and electronic documents under ICAS among stakeholders.
As we seek to make the Thailand a single payment area of one-day cheque clearing, cumbersome changes are necessary. This new payment infrastructure will help enhance the competitiveness of Thailand among its neighbours and the global community as well.
(The views expressed in this column are the writer’s own.) Published in the Nation on Monday, July 4, 2011 Source: Bank of Thailand