What is Cheque Truncation System or CTS
2010 :
The full form of CTS is Cheque Truncation System. RBI
has decided to launch this system and all banks across India are required to
follow RBI guidelines in this regard. As per RBI guidelines, now all banks
have to issue cheques conforming to the CTS 2010 standards with uniform
features.
How is CTS 2010 will be different from
earlier system of cheque clearance?
Under the CTS system, the physical movement of cheques
between banks will be elminated. At present , when you issue a cheque to
someone, he has deposit the cheque in his bank to get credit. Then
this cheque moves physcially from his bank to your bank which involves a
lot of time and risk. Now under CTS, instead of physical
movement of the cheque, an electronic image of the cheque will be transmitted to
the drawee branch / bank. The presenting bank
will retains the physical cheque.
Along with the electronic image, certain key relevant information is also
transmitted, such as date of presentation, presenting bank details, data on the
MICR band.
What is the purpose of CTS 2010
or What are the benefits of CTS?
The new process is being adopted to reduce the scope of
frauds as the new standardized cheques will have number of security features.
The system will also help in speed clearance of chequess and thus customers will
be able to get faster credit to their accounts. This will happen as
there will be no physical movement of the cheuqes and hence time is saved and
risk of loss of cheques in transit are totally eliminated.
What are the features of cheques issued
under CTS ? :
(a) Cheque printer details:
This is printed on the extreme left hand side of the cheque. The printer
details along with the words ‘CTS-2010’ is mentioned along the area where you
tear off the leaf from the cheque book.
(b) Rupee symbol:
The new symbol of the Indian rupee is printed beside the area where the amount
in figures needs to be written.
(c) Details of the bank and its logo:
The bank details and its logo are printed on the face of the cheque. However, it
is printed in invisible ink.
(d) Signature space indicator:
The words ‘please sign above’ are mentioned indicating the space where you will
need to sign the cheque.
(e) VOID pantograph:
This is a wavelike design, which is visible to the naked eye and seen below the
area where the account number is printed.
The above set of minimum security features would ensure uniformity across all
cheque forms issued by banks in the country which in turn will help
presenting banks while scrutinising / recognising cheques of drawee banks in an
image-based processing scenario. The homogeneity in security features is
expected to act as a deterrent against cheque frauds, while the standardisation
of field placements on cheque forms would enable straight-through-processing by
use of optical / image character recognition technology.
The benchmark prescriptions are collectively known as "CTS-2010 standard".
Indian Banks Association (IBA) and National Payments Corporation of India (NPCI)
are co-ordinating with the banks on implementation of the new standard.
Accordingly, the cheques issued are tested and certified by NPCI and only after
such cerification the cheques would be issued to the customers.
What Should Cheque Book Holders Should
Do :
(a) You should ensure that you use only
CTS-2010 compliant cheque leaves from April 1, 2013.
(b) You can check if you hold a CTS compliant
cheque book by verifying if the cheque leaves have the features mentioned above.
You need to apply in your bank for the same and it is available free of cost.
(c) If you have any unused cheque leaves with
you, these must be surrendered in your bank.
(d) In case you have given old post dated
cheques (like for your Housing Loan or Auto Loan) to some body, you must
exchange them with the CTS-compliant cheques immediately.
RBI has advised that
though non CTS-2010 standard cheques will continue to be accepted post July 31,
2013, they will be cleared at less frequent intervals and may incur additional
charges. RBI has advised to preferably use dark coloured ink while writing
CTS cheques.
In India, the Banking Sector has been dominated by
Government or Public Sector Banks for last 64 years. In 1954 the All
India Rural Credit Survey Committee submitted its report recommending
creation of a strong, integrated, state-sponsored, state-partnered commercial banking institution with an effective machinery of branches spread all over the country. The recommendation
of this committee led to establishment of first Public Sector Bank in
the name of State bank of India on July 01, 1955 by acquiring the
substantial part of share capital by Reserve Bank of India, of then
Imperial Bank of India. Similarly during 1956-59, as a result of
reorganization of princely states, the State Bank of India associate
Bank came into fold of Public sector banking.
