Outward and Inward clearing

Inward clearing means the cheques received by the bank from other banks

These - Inward clearing - cheques are the cheques drawn by the bank/branch customers on their account in favour of other parties. On receipt of the inward clearing, the cheques are posted to the various accounts on which they are drawn - meaning the accounts of the cheque issuer or drawer with the bank is debited to the account and the payment is made to the bank presentingthe cheque.

Outward clearing means the cheques sent for collection. 

When a particular branch receives instruments drawn on the other bank within the clearing zone and sends those instruments for collection through the clearing arrangement is considered as Outward Clearing for that particular branch. This branch is known as collecting branch.

In other words, inward clearing is for our branch and outward clearing is for other banks or branches. When we receive inward clearing we have to debit our customer account and when we receive outward clearing we have to send it to relevant bank for payment.