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.
Cheque truncation means stopping the flow of the physical cheques issued by a drawer to the drawee branch. The physical instrument is truncated at some point in route to the drawee branch and an electronic image of the cheque is sent to the drawee branch along with the relevant information like the MICR fields, date of presentation, presenting banks etc. This would eliminate the need to move the physical instruments across branches, except in exceptional circumstances, resulting in an effective reduction in the time required for payment of cheques, the associated cost of transit and delays in processing, etc., thus speeding up the process of collection or realization of cheques.
The Reserve Bank of India first implemented CTS in National Capital Region, New Delhi from 1 February 2008 with ten pilot banks and the deadline was set as 30 April 2008 for all the banks. This was followed by launch of CTS in Chennai on 24 September 2011. After migration from MICR to CTS the traditional MICR based cheque processing was discontinued in NCR and Chennai.[2]
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 benefitsedit
For banksedit
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 customersedit
Customer satisfaction is enhanced, due to the reduced turn around time (TAT). It also offers better reconciliation and fraud prevention.
^Frequently asked questions (FAQ) on cheque truncation project in the National Capital Region 3 March 2011 at the Wayback Machine
^RBI Frequently asked questions (FAQ) on cheque truncation system 17 December 2012 at the Wayback Machine
^RBI Notification on CTS-2010 issued in March 2013 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 29 May 2011 at the Wayback Machine
External linksedit
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
December 15, 2023
cheque, truncation, system, image, based, clearing, system, india, project, reserve, bank, india, commenced, 2010, faster, clearing, cheques, based, cheque, truncation, online, image, based, cheque, clearing, system, where, cheque, images, magnetic, character,. 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 Cheque truncation means stopping the flow of the physical cheques issued by a drawer to the drawee branch The physical instrument is truncated at some point in route to the drawee branch and an electronic image of the cheque is sent to the drawee branch along with the relevant information like the MICR fields date of presentation presenting banks etc This would eliminate the need to move the physical instruments across branches except in exceptional circumstances resulting in an effective reduction in the time required for payment of cheques the associated cost of transit and delays in processing etc thus speeding up the process of collection or realization of cheques Contents 1 History 2 Expected benefits 2 1 For banks 2 2 For customers 3 See also 4 References 5 External linksHistory editThe Reserve Bank of India first implemented CTS in National Capital Region New Delhi from 1 February 2008 with ten pilot banks and the deadline was set as 30 April 2008 for all the banks This was followed by launch of CTS in Chennai on 24 September 2011 After migration from MICR to CTS the traditional MICR based cheque processing was discontinued in NCR and Chennai 2 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 editFor banks edit 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 edit Customer satisfaction is enhanced due to the reduced turn around time TAT It also offers better reconciliation and fraud prevention See also edit nbsp India portal nbsp Banks portal nbsp Money portalCheque truncation Cheque fraud Reserve Bank of IndiaReferences edit 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 amp FAQs banknetindia com Archived 29 May 2011 at the Wayback MachineExternal links editA 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 Retrieved from https en wikipedia org w index php title Cheque Truncation System amp oldid 1120039157, wikipedia, wiki, book, books, library,
