ZAMBIA ELECTRONIC CLEARING HOUSE LIMITED CHEQUE IMAGE CLEARING AND DIRECT DEBIT AND CREDIT CLEARING RULES ZAMBIA ELECTRONIC CLEARING HOUSE LIMITED CHEQUE IMAGE CLEARING AND DIRECT DEBIT AND CREDIT CLEARING RULES Revised January 2014 TABLE OF CONTENTS PART I: GENERAL ........................................................................................................................................... 6 1 PURPOSE ......................................................................................................................................................... 6 2 COMMENCEMENT ........................................................................................................................................... 6 3 INTERPRETATION ........................................................................................................................................... 6 4 DESCRIPTION OF ZECH ............................................................................................................................... 12 5 OPERATIONS OF THE ZECH ........................................................................................................................ 12 6 COMMUNICATION PROTOCOLS ................................................................................................................. 13 7 MEMBERSHIP IN THE ZAMBIA ELECTRONIC CLEARING HOUSE .......................................................... 13 8 PARTICIPATION IN THE INTERBANK CLEARING SYSTEM ...................................................................... 13 9 RESPONSIBILITIES OF ZECHL .................................................................................................................... 16 10 THE ROLE OF ZECHL ............................................................................................................................... 16 11 RESPONSIBILITIES OF THE BANK OF ZAMBIA .................................................................................... 17 12 ADDITION AND DELETION OF BRANCHES ........................................................................................... 18 13 RESIGNATION OF A MEMBER/PARTICIPATING BANK ........................................................................ 18 14 EXPULSION OR SUSPENSION OF MEMBER/PARTICIPATING BANKS .............................................. 18 15 MEASURES TO MITIGATE MEMBER/PARTICIPATING BANK’S FAILURE TO SETTLE ..................... 19 16 MEMBER/PARTICIPATING BANK’S FAILURE TO SETTLE ................................................................... 20 17 DISPUTE RESOLUTION ............................................................................................................................ 22 18 LIMIT OF LIABILITY .................................................................................................................................. 23 19 BALANCES MAINTAINED AT THE BANK OF ZAMBIA .......................................................................... 23 20 EMERGENCY CONDITIONS ..................................................................................................................... 23 21 COMPLETENESS OF CLEARING ............................................................................................................ 24 22 ADDRESS FOR NOTICES ......................................................................................................................... 24 23 VIOLATION OF LAW ................................................................................................................................. 24 24 GOVERNING LAW ..................................................................................................................................... 24 25 RETENTION OF RECORDS ...................................................................................................................... 24 26 MONITORING, REVIEW AND ACCESSIBILITY OF THE RULES ............................................................ 24 27 CONTINUITY PLAN ................................................................................................................................... 24 PART II: CHEQUE IMAGE CLEARING OPERATIONS ................................................................................. 25 28 THE ZECH FACILITY ................................................................................................................................. 25 ZECH Rules – Revised 15 January 2014 Page 2 of 152 29 ELIGIBLE ITEMS FOR CHEQUE IMAGE CLEARING .............................................................................. 25 30 RESPONSIBILITIES OF COLLECTING BANK ......................................................................................... 25 31 ZECH OBLIGATIONS ON RECEIPT OF THE CIC FROM THE COLLECTING BANK ............................ 29 32 RESPONSIBILITIES OF PAYING BANK .................................................................................................. 30 32.3 UNPAID ITEMS .......................................................................................................................................... 31 33 BILATERAL CLEARING ............................................................................................................................ 33 34 LIABILITY/DUTY OF CARE ....................................................................................................................... 35 35 ELIGIBLE ITEMS INADVERTENTLY PAID ............................................................................................... 36 36 DISCREPANCY ITEMS .............................................................................................................................. 36 37 RECALL OF ERRONEOUSLY GENERATED EJ FILES .......................................................................... 36 38 REVERSAL OF ERRONEOUS EJ FILES/TRANSACTIONS .................................................................... 37 39 ITEMS MISLAID BY A PAYING BANK BRANCH ..................................................................................... 37 40 TREATMENT OF ERRONEOUS ELIGIBLE ITEMS .................................................................................. 38 41 ARCHIVING OF PHYSICAL ELIGIBLE ITEMS ......................................................................................... 39 42 COMPENSATION FOR UNDUE ENRICHMENT ....................................................................................... 39 43 PENALTIES ................................................................................................................................................ 40 PART III: DIRECT DEBIT AND CREDIT CLEARING (DDACC) OPERATIONS .................................................... 42 44 OVERVIEW OF DDACC ............................................................................................................................. 42 45 THE ZECH FACILITY ................................................................................................................................. 43 46 PREPARATION OF DDACC FILES BY PRESENTING BANKS .............................................................. 43 47 RECALL OF ERRONEOUSLY GENERATED EFT FILES ........................................................................ 44 48 REVERSAL OF ERRONEOUS EFT FILES/TRANSACTIONS .................................................................. 45 49 TRANSMISSION/PRESENTATION OF ELECTRONIC DATA FILES ....................................................... 45 50 PROCESSING OF DDACC FILES BY ZECHL .......................................................................................... 45 51 THE RECEIVING BANK’S OBLIGATIONS ON RECEIPT OF CREDITS VIA DDACC ............................ 46 52 PAYING BANKS’ OBLIGATIONS ON RECEIPT OF A DIRECT DEBIT FOR A CUSTOMER’S ACCOUNT 46 53 ELIGIBLE ITEMS FOR DDACC ................................................................................................................. 47 54 RESPONSIBILITIES OF COLLECTING BANK - DDACC ......................................................................... 47 55 RESPONSIBILITIES OF RECEIVING BANK - DDACC ............................................................................ 47 56 ERRONEOUS DIRECT DEBIT ................................................................................................................... 47 57 UNPAID DIRECT DEBITS .......................................................................................................................... 48 58 REASONS FOR RETURN .......................................................................................................................... 48 59 TIMELY RETURN OF UNPAID DIRECT DEBITS ..................................................................................... 49 60 RE-PRESENTATION OF AN UNPAID DIRECT DEBIT ............................................................................ 49 61 UNAPPLIED DIRECT CREDITS ................................................................................................................ 50 62 COMPENSATION FOR UNDUE ENRICHMENT ....................................................................................... 50 63 THE BENEFITS OF DDACC ...................................................................................................................... 51 PART IV: SERVICE PROVIDERS ..................................................................................................................... 52 64 BECOMING A DIRECT DEBIT SERVICE PROVIDER .............................................................................