National Institutional Facilitation Technologies (Pvt) Ltd (NIFT) was incorporated in September 1995 as a joint venture between a consortium of six banks and entrepreneurs from the private sector. Today a total of 42 banks including State Bank of Pakistan (SBP) are participating members of NIFT's Automated Clearing House (ACH).
Almost a decade back the joint venture banks and State Bank of Pakistan took a bold step of setting up a public-private partnership and also selecting Imaged-based Automated Clearing, a technology still in its infancy at that time.
Undoubtedly NIFT was the first Image-based ACH in the region and today when others in the region are considering moving to Image-based systems, to introduce Electronic Presentation and Cheque Truncation, NIFT already has in stock rich experience of working with images and image-based systems.
NIFT commenced its operations in 1996 and is currently operating in seven cities namely, Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad, Hyderabad and Peshawar. The aim of NIFT is to create a nation-wide grid based on hub-n-spoke model rendering services to all parts of the country.
Each operational center is accompanied by a state-of-the-art Data Center, equipped with industry-standard, high-speed image-based technology.
Operating under SBP's supervision, stringent industry standards & controls ensuring privacy about the activities of banks and their customers, NIFT over the period of time has earned the goodwill and Trust of its stakeholders. The services rendered by NIFT have come to be characterised by its slogan - The Image of Trust.
Additionally NIFT has also branched into providing Utility Bill Payment processing, collection & Delivery of stubs/ scrolls/ advices, reconciliation, Drop-box facility etc. NIFT currently offers Utility Bill Payment Process facilitation services to SSGC, SNGPL and IESCO. Previously, these services were also rendered to LESCO. In doing so, the company has established itself as the leader in image-based document processing.
After the promulgation of ETO (Electronic Transaction Ordinance) - 2002, NIFT's determination to introduce Image-based presentation for clearance of banking instruments and their truncation at point of deposit got flared up and provided additional steam to venture into technologies, namely PKI or Public Key Cryptography, that can provide necessary capability to ensure strong authentication, confidentiality, integrity of data and non-repudiation while capturing and exchanging images and electronic information between presenting and paying banks/ branches.
NIFTeTRUSTSM is to date the most broad and technologically advanced initiative of NIFT ensuring security and safety of commerce and communications over the networks. NIFTeTRUSTSM (a service mark of NIFT) is the First Certificate Authority (PKI/ CA) in Pakistan established under VeriSign Trust Network as one of its Global Affiliates, with its military-grade data center certified to international standards like X9.79 and ISO-17799.
NIFT has paved way for organisations in Pakistan to safely and securely operate online businesses under a Globally Trusted Community.
With ETO-2002 in place, Pakistan has joined an exclusive band of countries that provide required procedures to recognise electronic documents that carry non-repudiation and be presented in Pakistani courts carrying exact legal standing as any written and signed document.
While ETO is a broad framework for electronic data interchange, specific legislations are being developed by the Pakistan government to focus on specific industry verticals.
SOME OF THE SALIENT FEATURES OF THE ETO ARE:
-- 'Legal recognition of electronic documents - No document, record, information, communication or transaction shall be denied legal recognition, admissibility, effect, validity, proof or enforceability on the ground that it is in electronic form and has not been attested by any witness.'
-- 'Legal recognition of electronic signatures - The requirement under any law for affixation of signatures shall be deemed satisfied where electronic signatures or advanced electronic signature are applied.'
-- 'Proof of electronic signature - An electronic signature may be proved in any manner, in order to verify that the electronic document is of the person that has executed it with the intention and for the purpose of verifying its authenticity or integrity or both.'
-- 'Stamp Duty - Notwithstanding anything contained in the Stamp Act, 1899 (II of 1899), for a period of two years from the date of commencement of this Ordinance or till the time the Provincial Governments devise and implement appropriate measures for payment and recovery of stamp duty through electronic means, whichever is later, stamp duty shall not be payable in respect of any instrument executed in electronic form.'
-- 'Attestation and notarisation - Notwithstanding anything contained in any law for the time being in force, no electronic document shall require attestation and notarisation for a period of two years from the date of commencement of this Ordinance or till the time the appropriate authority devise and implement measures for attestation and notarisation of electronic documents, whichever is later.'
-- 'Certified copies - Where any law requires or permits the production of certified copies of any records, such requirement or permission shall extend to printouts or other forms of display of electronic documents where, in addition to fulfilment of the requirements as may be specified in such law relating to certification, it is verified in the manner laid down by the appropriate authority.'
When NIFT, under the guidance and knowledgeable stewardship of the stakeholders, decided to take up the above technologies it may have seemed a little too far fetched but today, for a fact we know that other countries are mandating image exchange and digital signature to implement Cheque Truncation to bring in efficiencies in age old clearance and payment systems employing physical movement of the documents.
Good examples to follow are Check-21 Act of USA and amendment to Indian Negotiable Instrument Act of 1881.
Another worth mentioning fact is NIFT use of scalable software from its partner Wausau Financial Systems Inc. USA who has also taken a leading role in implementation of Check-21 Act by enhancing their Proof of Deposit solution to cater for Image Exchange and Cheque Truncation as stipulated in the Act. NIFT has deployed the same solution in all its centers irrespective of the volumes achieving inter-operability and easy of use.
To meet the local requirements NIFT has also developed additional software layer namely NACHSYS providing it the flexibility to meet all challenges of the localisation of the core solution from Wausau Financial systems Inc.
After more or less a decade, today NIFT stands tall among world leaders with its extensive knowledge and experience of clearance of banking instruments, imaging, image archiving, image exchange, encryption and digital signatures, existing legal framework and of course the last but not the least to mention is state-of-the-art infrastructure that NIFT has build over the time.
Presently, with the cost of technologies coming down and within the reach of countries like ours, NIFT with its preparedness achieved over time is embarking upon another bold endeavour to offer Electronic Presentation, Image Exchange and Cheque Truncation to the banks in Pakistan.
NIFT recently presented details of its phased plan to introduce these to improve upon its services while minimising the cost of cheque clearing to its customer banks.
We believe that NIFT's services, such as Inter-city clearing and Same-day High Value clearing, have achieved limits of their effectiveness and reach due to the limitations imposed by the physical movement of the documents. NIFT is well aware of these facts and has selected Inter-city clearing as strong candidate for Electronic Cheque Presentment and Cheque Truncation.
This would not only reduce the time to clear cheques and reduce cost of processing but it will also take away the uncertainties in physical delivery of instruments to the drawer's branch due to bad weather or lack means of transportation.
NIFT is ready to work with its customer banks to prepare a comprehensive plan in the first quarter of the current year for evaluating the existing infrastructure, legal framework and methodology to rollout a pilot project to prepare itself and the banks in Pakistan to move forward and get on the march for achieving the level of excellence expected in the coming times.
(The writer is Manager e-Business Development - NIFT)
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