Image-based check collection

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With the introduction of the image-based check collection procedure (ISE procedure) by the Deutsche Bundesbank in conjunction with the German banking industry on September 3, 2007, the check collection procedure is to be modernized and simplified. In the ISE procedure, the scanned image of the check - from an amount of 6,000 euros - is forwarded to the Deutsche Bundesbank together with the clearing data set as part of the remote data transmission.

This method enables the checks to be processed more cost-effectively, since the physical transport of the checks, the check coding and the creation of correction envelopes, among other things for damaged checks, are eliminated.

Duties

Active ISE compulsory

The first collection agency scans the check, converts it into an electronic image and creates a clearing data record . This can also be done by means of a service provider.

Passive ISE compulsory

The referring bank records the ISE clearing data records and picks up the image data records from the Bundesbank's ExtraNet.

Check cashing in the ISE procedure

The bank referred decides whether to cash the check on the basis of the image. However, it is possible to request the original check during the retention period (3 years from the end of the year in which it was created).

Non-redemption in the ISE procedure

For the non-cashing of the ISE check, the legal requirements must be met:

  • timely presentation of the check (Art. 29 Check Act )
  • Determination of non-cashing as well
  • timely back-calculation (Art. 41 Check Act)

The Deutsche Bundesbank then checks whether the requirements of Article 40 of the Checks Act (recourse in the event of non-payment) are met.

Legal basis

The legal basis is the “Ordinance on Settlement Offices in Checks” (Settlement Offices Ordinance) of October 5, 2005. It replaces the “Ordinance on Settlement Offices in Bills of Exchange and Checks” of November 10, 1953.

With the newly designed regulation, the Deutsche Bundesbank is used as a clearing house within the meaning of Article 31, Paragraph 1 of the Check Act and enables the check images to be submitted by means of electronic remote data transmission .

The submission of a complete copy of the check (i.e. front and back) by remote data transmission replaces the receipt of the check on paper. The images are equivalent to checks posted on paper.

The date of electronic submission to the clearing house is decisive for compliance with the submission deadlines under Article 29 of the Checks Act. This day also applies to the calculation of the return deadline according to the check agreement .

In the event of the check not being cashed, the right of recourse will in principle remain intact.

Replacement of the GSE process

The large-value check collection procedure (GSE procedure), which was previously applicable for checks with an amount limit of EUR 6,000 or more, in which the electronic forwarding of clearing data records and the physical presentation of the checks was required, is being replaced by the ISE procedure.

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