The Malta Clearing House was set up in the early 1970s and its purpose is to provide cheque and money order clearing arrangements between the participating institutions. The Central Bank of Malta has, under the provisions of the Central Bank of Malta Act, the authority to promote the establishment of a bank clearing system and to provide facilities for that system.

There is no specific legislation governing the clearing process for cheques in Malta. The system is based entirely on agreements, and rules and regulations established by the Malta Clearing House. These specify the participants, the decision-making mechanism and associated voting rights, and the operational rules for the clearing of cheques drawn on the respective banks. The tasks involved in the processing of cheques through the clearing house are shared between the participating institutions, with the clearing house only facilitating the exchange of the instruments and the associated electronic information.

Six credit institutions, together with the Central Bank of Malta, and one financial institution participate in the Malta Clearing House. Should a bank decide not to become a member of the clearing house, it may appoint one of the existing members as its agent, with settlement then taking place through that agent’s call account. The other participating banks would treat this bank as another branch of the agent bank. Participation is open to all credit institutions and to financial institutions providing related services. All credit institutions operating cheque issuing accounts denominated in euro are eligible to join the Malta Clearing House.