KARACHI, Aug 23: The State Bank on Thursday decided to take over the settlement of inter-bank ATM transactions from MCB Bank and ABN Amro Bank.

A central bank official described the move as a vital decision, which would provide relief to the thousands of people whose money was lost in the faulty ATM system.

Banking sources said in thousands of cases millions of rupees were stuck up due to the faulty system of settlement. The fault usually takes place when an account holder of one bank withdraws from ATM of another bank.

Usually the ATM does not give money to the customer but the balance sheet shows that the money has been received.

The new settlement system will be effective from October 1, 2007. The settlement is to be made in banks’ current accounts maintained at Karachi Office SBP BSC (Bank).The ATMs are handled by 1LINK and MNet. The money lost through these switches, takes 6 month to one year to recover. This has been a serious problem for the ATM users, who are in millions and are spread across the country. Both MCB and ABN Amro used to blame each other for the fault while the customers had to suffer.

The State Bank said that 1LINK and MNet will prepare bank-wise statements of all ATM transactions executed through respective switches between 00:00:00 hours to 23:59:59 hours. Both switches will submit the net position of receivables and payables (inter-bank, intra-switch) to the SBP on or before 12:30 pm in the agreed format to debit or credit the concerned banks’ current accounts.

“The SBP will only debit or credit the current accounts of banks on the basis of net off positions provided by the switches and will inform the concerned banks and switches accordingly,” said the SBP.

A high official of the SBP said there was no mediation for the stuck-up transactions and the system required a mediator, which the State Bank would now provide.

“The State Bank has taken the responsibility for settlement of transactions after receiving thousands of complaints from the users and the problem was highlighted by the media also,” said the official.

For settlement of inter-bank, inter-switch ATM transactions, MCB Bank Limited, through the authorised persons, will submit to SBP on or before 12:30 pm one combined net position of receivables and payables in the format to debit or credit the concerned banks’ current accounts maintained at SBP.

Switches will also report the same net positions to the respective member banks so that their treasury departments can ensure timely action to cover net shortfall or manage surplus in their accounts with SBP. Switches will have to submit separate report for any subsequent adjustments in previous statements along with the net position of the day. They will maintain complete details (i.e. date wise, bank wise) of clearing and adjustments for inspection purpose.

All clearing related activities other than settlement will continue to be performed by the respective switches on behalf of their member banks as per agreed procedures.