Personal Finance: Barclays' instant cheque clearing puts rivals to shame

WE MAY live in the age of electronic banking, but some things are still depressingly traditional: Like the way it takes up to five working days to get your hands on any cash paid by cheque into your bank account. If you pay money into a building society account you may have to wait up to 10 days to get at your cash.

Most of us have experienced the odd sensation of being penniless while waiting for a large sum to clear, and a review of the cheque clearing system is long overdue.

At the moment data is exchanged between banks through a secure network, but the cheques still have to pass physically through exchange centres where they are sorted and returned to the bank on which they are drawn. The bank staff then look at the cheques and make the decision on whether or not to pay them.

Banks have always argued they can't change the cumbersome clearing system on their own, so at last someone has done the decent thing and allowed customers to be "loaned" cash before cheques have cleared, at no cost. Some banks already do this on an informal basis, but Barclays now offers it officially.

Customers can now draw up to pounds 1,000 against each uncleared cheque. It's up to you to be sure the cheque will clear. You have to repay the loaned cash if it doesn't.

Barclays is running a massive ad campaign for its revamped current account on the back of this innovation, but I'd be surprised if they pick up many new customers. The ads are extremely dull, for starters. And cheque use is on the decline among personal bank customers. We write 25 per cent fewer cheques than we did in 1990 and many of us are switching to plastic for just about all our transactions. But even if we aren't writing the cheques against our own accounts, we still need to pay them in.

Apacs, the association for payment clearing services (run by the banks), says that the clearing system takes three days. Banks are allowed to add on any amount of extra time, usually one or two extra days, before cheques clear. They say they need the extra time to identify bounced cheques.

So we all suffer delays and stress because the banks refuse to take any chances with their own cash. Let's hope Barclays' action will shame the rest of them into trusting their long-suffering customers.

IF YOU haven't got round to filling in your tax return, don't panic. The 30 September deadline is a good one to aim for, because the tax office will calculate your liability. If you don't make it there are no dire consequences, but you might have to write a "guesstimate" cheque for your tax bill in January 1999. See our Money Q&A opposite.