How are foreign cheques cleared?
There is no overseas cross-border cheque clearing system. Foreign cheques, therefore, have to be sent abroad for payment to the bank on which they are drawn. This process often takes several weeks and can be expensive as it is done on a cheque by cheque basis. This process is called collection (as in "collection of funds"). If the cheque is in a foreign currency, there will be a charge for converting it to sterling.
By the time the beneficiary bank has received payment from the overseas bank, the exchange rate may have moved so the beneficiary customer may get less money than would have been the case on the day the cheque was paid in.
Some banks may provide value immediately subject to recourse. This means that the beneficiary's bank will reclaim the money from the beneficiary if the cheque bounces and because there are no fixed timescales, this might happen several weeks later. This service is known as negotiation. There is a fee for both these services.