Every time you deposit a cheque to your account, you will encounter an entry in the passbook that says 'By CLG'. Browse through this article to know about CLG Full Form and the process involved, from the cheque deposit to the credit of the proceeds into your account.
Often you would have come across the entry 'By Clg' when reviewing your passbook entries. For example, you might not have paid much attention to the work CLG and would not have put in efforts to know the CLG Full Form. Your whole focus would be only to know if the amount of the cheque deposited in the bank for clearance has come into the account.
CLG full form is Clearing. It is a process wherein the cheque deposited by you will be sent to the bank on which it is drawn through the Clearing House and collect the money from the respective bank to credit it to your account.
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When a cheque is issued to an individual, they will deposit the cheque into their bank account for clearance. The cheques have to be collected from various banks and distributed to the banks on which they are drawn to complete the clearing process.
Clearing House is a hub for receiving cheques from various banks and distributing the same to the banks on which the cheques are drawn for the collection of funds.
There are about 860 clearing houses in India, out of which 840 are managed by SBI and its associates, 14 are controlled by RBI and six are managed by Nationalised Banks. SBI and its associates and six nationalised banks manage the clearinghouses wherever RBI does not have its presence
Every bank has to be a member of the clearinghouse to facilitate relative branches to send the cheques deposited for clearing through the clearinghouse. Some sub-members are sponsored by a member bank and participate in the Clearing in the same way that the member bank does.
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A cheque clearance is initiated when a customer deposits a cheque into his bank account. The various steps involved in the clearance of the cheque to get the funds credited to the customer's account is given below:
The settlement of funds between the branches concerned and the service branch involves the transfer of funds. The clearing process is complete only when the drawee's account is debited, and the payee's account is credited. This happens only after the Returns Clearing, wherein the unpaid cheques are identified thoroughly.
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With this article, you are able to understand the CLG Full form and the process involved for the amount mentioned in the cheque presented to be credited to your account. You can review your passbook to confirm the credit to your account. The term 'By CLG' mentioned in the passbook denotes that the cheque sent in ClearingClearing has been passed for payment.
The normal cleaning process took about 2 to 3 days for cheque clearance. With the introduction of the Cheque Truncation System, which is an electronic mode, the clearance of cheques has become much faster.
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The normal clearing process took about 2 to 3 days for the amount to be credited to your account. With the introduction of the Cheque Truncation System, the time lag has reduced, and the clearance happens much faster.
Cheque Truncation System eliminates the physical movement of the instruments from one place to another. An electronic image of the cheques is transmitted to the paying branch through the clearinghouse. The electronic image will contain all the information like date of presentation, presenting bank and the date on the MICR band. Only in exceptional cases the physical movement of the instrument will be involved.
The following are the advantages of CTS over the normal clearing process.
Instruments that are CTS 2010 compliant can only be presented for clearance CTS.
No. The customers can continue with the same process of presenting the cheques except that they should use coloured inks that are image-friendly while filling up the cheques. Cheques with material alterations like overwriting the date, amount, etc., will not be processed through CTS.
The reasons the cheques returned unpaid are given below:
The following precautions should be taken to avoid fraud.