Banking Alert! RBI sets deadline for non-CTS cheque books
The Reserve Bank of India (RBI) in its Statement on Developmental and Regulatory Policies issued today has informed that the Cheque Truncation System (CTS), which is currently operational at the major clearing houses of the country will be made operational pan India by September 2020. This means if you are still holding a non-CTS cheque book, your cheques will not get cleared by the banks after that.
Most banks have already stopped clearing non- CTS cheques since January 1, 2019. if you are still holding a non- CTS cheque book, it is better you get it replaced from your banker. If the cheque book is not with CTS-2010 cheque leafs, they are referred to as non-CTS cheque books.
Cheque Truncation System basically helps in faster clearance of the cheques in the banking records. The time taken in clearance is less and the process is even cost-effective. In cheque truncation, the movement of the physical instrument is stopped and replaced by electronic images and associated MICR line of the cheque.
According to banking experts, CTS-2010 cheques have certain common security features and standardised field placements for enabling image based processing of cheques through optical / image character recognition technology, which are absent in non-CTS cheques.
RBI has been taking steps to make cheque transactions smoother and faster. Since cheques continue to be an important payment instrument, RBI has been taking steps to enhance the security and efficiency of the present CTS mechanism, including bringing in uniformity and harmony in processes.