Question & AnswerQ&A (BSP CIRCULAR NO. 214)
A dishonored COCI is defined as a check or other clearing item that is dishonored by reason of insufficiency of funds or credit, and must be returned by the drawee bank to the negotiating bank within the prescribed clearing deadlines.
The two clearing windows are the AM Returned COCI Clearing (7:30 AM to 10:00 AM for PCHC and 8:00 AM to 9:30 AM for BSP RCCs) and the PM Returned COCI Clearing, which coincides with the afternoon regular clearing session.
The returned COCI in the AM clearing window shall be given value on the same date as the original date of presentation to the clearing house or BSP RCC.
The amounts of debits and credits on the original presentation date are reversed to the extent of returned COCI, restoring the demand deposit balances of banks with BSP to their state before the affected clearing results.
The dishonored COCI must be returned by the drawee bank to the negotiating bank within the period specified in the clearing circular letters issued by BSP for out-of-town exchanges.
It must be returned by the drawee bank to the holder or negotiating bank not later than the business day following its presentation for payment; the negotiating bank must then return it to the holder by the next business day after receipt.
Both Borrower and Lender must transmit separate instructions using confidential IDs and passwords; these instructions undergo authentication to confirm proper approval and are matched by PCHC to ensure no discrepancies.
Settlement refers to BSP acting upon an automated summary of IBCL fund transfer instructions signed by authorized PCHC officers, posting net results with updated demand deposit account statements available by 2:00 PM on the business day after the value date.
BSP may unwind transactions on a Last In, First Out (LIFO) basis if there are insufficient funds, starting with lending instructions ahead of repayment transactions, unwinding the entire matched transaction without partial reversal.
The circular took effect on November 15, 1999.