Module: | Continuous Clearing (CCSR) & Penalties
Q23: Identify the correct combination of rules regarding the "Deemed Approval" mechanism in the Continuous Clearing environment:
A cheque is considered "Deemed Approved" if the drawee bank takes no action within the stipulated time.
The expiry time for a cheque presented at 11:00 AM is 5:00 PM on the same day.
Once a cheque is "Deemed Approved," the drawee bank cannot return it through the system.
The expiry time for a cheque presented at 11:00 AM is 5:00 PM on the same day.
Once a cheque is "Deemed Approved," the drawee bank cannot return it through the system.
✅ Correct Answer: B
Rule 1 (Correct): The system relies on "Negative Confirmation." If the Drawee bank does not explicitly "Return" (dishonour) the cheque within the window, the system treats it as "Deemed Approved" (Paid) to ensure flow continuity.
Rule 2 (Incorrect): The response window is T+3 Hours.
If a cheque is presented at 11:00 AM, the expiry time is 11:00 AM + 3 hours = 2:00 PM, not 5:00 PM.
Rule 3 (Correct): Once the T+3 timer expires and status becomes "Deemed Approved," the settlement file is generated.
The Drawee bank cannot subsequently return the cheque via the CTS system; they would have to settle it outside the system or via separate adjustment protocols.
Rule 2 (Incorrect): The response window is T+3 Hours.
If a cheque is presented at 11:00 AM, the expiry time is 11:00 AM + 3 hours = 2:00 PM, not 5:00 PM.
Rule 3 (Correct): Once the T+3 timer expires and status becomes "Deemed Approved," the settlement file is generated.
The Drawee bank cannot subsequently return the cheque via the CTS system; they would have to settle it outside the system or via separate adjustment protocols.