Cheque Truncation System
Cheque Truncation System (CTS) or Image-based Clearing System (ICS), in India, is a project of the Reserve Bank of India (RBI), commenced in 2010, for faster clearing of cheques.[1] CTS is based on a cheque truncation or online image-based cheque clearing system where cheque images and magnetic ink character recognition (MICR) data are captured at the collecting bank branch and transmitted electronically.
History
The Reserve Bank of India first implemented CTS in
Based on the experience gained and the benefits that would accrue to the customers and banks, it was decided to bring CTS into operation across the country. Starting 1 August 2013 only CTS-2010 compliant cheques would be accepted for clearing.[3] On 17 July 2013 the RBI extended the deadline to 31 December 2013.[4]
Expected benefits
For banks
Banks derive multiple benefits through the implementation of CTS, like a faster clearing cycle meaning technically possible realization of proceeds of a cheque within the same day. It offers better reconciliation/ verification, better customer service and enhanced customer window. Operational efficiency provides a direct boost to bottom lines of banks as clearing of local cheques is a high cost low revenue activity. Besides, it reduces operational risk by securing the transmission route. Centralized image archival systems ensure that data storage and retrieval is easy. Reduction of manual tasks leads to reduction of errors. Real-time tracking and visibility of the cheques, less frauds with secured transfer of images to the RBI are other benefits that banks derive from this solution.[5]
For customers
Customer satisfaction is enhanced, due to the reduced turn around time (TAT). It also offers better reconciliation and fraud prevention.
See also
References
- ^ Frequently asked questions (FAQ) on cheque truncation project in the National Capital Region Archived 3 March 2011 at the Wayback Machine
- ^ RBI Frequently asked questions (FAQ) on cheque truncation system Archived 17 December 2012 at the Wayback Machine
- ^ RBI Notification on CTS-2010 issued in March 2013 Archived 22 March 2013 at the Wayback Machine
- ^ "Non-CTS-2010 cheques to be cleared till Dec 31: RBI".
- ^ Cheque Truncation System (CTS) in India- An Introduction & FAQs, banknetindia.com Archived 29 May 2011 at the Wayback Machine
External links
- A pan-India cheque truncation system five years away press release, dnaindia.com
- RBI says new norms applicable to cheque truncation system only press release, moneylife.in
- RBI regulation on cheque truncation system starts news release, oneindia.in
- more articles on cheque truncation system More articles on cheque truncation system, ChequeMan
- moving to CTS-2010 compliant cheques Checklist for moving to CTS - 2010 Compliant cheques, ChequeMan