Cheque Truncation System – New Benchmark for Cheques in Banks

It might happen that your cheque’s start bouncing and do not get accepted from Jan 1, 2013 . There is a new standard in banking called as Cheque Truncation System or CTS 2010 , which all the banks have to follow now. RBI has issued a cricultelling all banks that they should only process and accept those cheques which follow CTS guidelines.

What is cheque truncation system or CTS?

Its just a new improved structure for chqeues and a set of guidelines which will change the way cheques are being processed and cleared. Right now, all the cheques are sent directly physical to the other bank for clearance, but with this new Cheque Truncation System guidelines, the banks will send the digital version of cheques (read scanned image) to the other bank and the clearance will happen almost same day or very fast. Some of the features of CTS cheques would be

·         It would have the wordings “please sign above this line” at right bottom

·         All CTS-2010 cheques will have a watermark with the words “CTS INDIA”, which can be seen against a light

·         A bank logo will be on cheque with a Ultra Violet Ink , which can be seen only under UV Scanners.

·         The Cheque Truncation System 2010 enabled cheques will not allow any alterations. If there is any mistakes, the cheque will be invalid

·         “payable at par at all branches of the bank in India” text will be at the bottom of all the cheques

·         There will be IFSC and MICR code on the cheque

·         You will have to sign the cheque will a darker ink, so that your signatures are valid for scanning.

If you look at these features, you can simply see that these are required for digital processing and once these Cheque Truncation System enabled cheques arrive , the whole banking system will start clearing the cheques in a must faster time. This will improve banking and save paper . 

You already have CTS compliant cheque books?

Note that RBI has directed all banks to issue Cheque Truncation System 2010 enabled cheque books already from last many months. So it might happen that your cheque books are already complaint with those standards . So please check it once and dont rush to bank to issue you new cheque books .