Chemical Banking Corp., National Westminster Bank, and several other banks are installing an electronic check presentment system from Sterling Software Inc., Dallas.

Electronic check presentment, or ECP, involves moving check data ahead of the paper during check collection. Experts said ECP reduces return-item risk by promptly detecting checks drawn on insufficient funds.

Electronic presentment also cuts down on the amount of float banks face, because they can post to demand deposit accounts earlier in the process.

"It's come of age," said Alan Singer, senior vice president with ABN- Amro Bank, Chicago, a unit of ABN-Amro Holding, Amsterdam. Everyone in the New York Clearing House is capable of electronic presentment, he said, "and now its starting at the Chicago Clearing House."

Mr. Singer said his $50 billion-asset institution, which owns several commercial banks and savings and loans, is upgrading its entire check processing systems before installing Sterling's software, called Vector Presentment. The Chicago bank plans to be ECP-capable by September.

The notion of presenting checks electronically has been around for at least 10 years, but banks have been slow to implemented it.

Bankers have been reluctant to assume the risks involved in posting check information to demand deposit accounts early, only to be unable to reconcile those accounts when the actual checks arrive.

But William W. Hymes, president of Sterling's banking systems division, said the increasing usage of electronic presentment indicated a "strong commitment" by the banking industry.

"As the number of ECP-enabled trading partners increases, the advantages and savings that our clients enjoy will grow in direct proportion," he said.

Other banks that are installing the Sterling system are Firstar Bank, Milwaukee, and Trustmark National Bank, Jackson, Miss. Union Bank, Los Angeles, was the beta test site of the two-year-old system.

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