Bhopal, Feb 18 (IANS) Bank clearing houses in Madhya Pradesh will discontinue high value clearing operations for cheques by the end of this financial year to encourage the use of more efficient payments systems, banking industry officials said.

High value cheque clearing implies that a cheque valued above Rs.1 million, deposited within a certain time limit on a working day, would get credited the same day, taking six-to-seven hours, as against 24 hours for normal operations.

'The decision to discontinue high value cheque clearing at all the four clearing houses in Indore, Bhopal, Gwalior and Jabalpur has been taken after a meeting with officials of the central bank,' said a bank official.

The Reserve Bank of India has already issued guidelines to phase out high-value clearing since faster alternative methods of funds transfer, such as real time gross settlement and national electronic fund transfer are now available.

Real time gross settlements are offered by 1l5 banks at 10,000 centres through 62,000 branches across India, the official said, adding that out of 30 clearing centres in the country, high value clearing has been discontinued at 20 centres.

Once this process is discontinued, bank customers would have the option of alternative fund transfer methods which are efficient payment systems made available by the Reserve Bank, said the bank official.

'This will not only reduce paper-based transactions such as cheques, demand drafts or pay orders and improve efficiency, but customers will also benefit from lower cost of transaction as they have to pay higher commission on instruments like demand drafts.'