It is a real herculean exercise that all the cheque books of Indian consumers are being changed to CTS 2010 chequebooks. The vision is good that all the cheques will be scannable and will reduce the transaction time in clearance of the cheques. Well CTS stands for Cheque Truncation System. Now what exactly is CTS 2010 and below illustrations will explain the same in a short and sweet manner.
- In this Cheque Truncation System (CTS), say cheque is of Yes bank than the recipient bank will not send the paper cheque to the clearing house, but instead, it’d merely scan the cheque, and electronically send the image + MICR data, to the clearing house.
- From the clearing house, the data would go to the paying bank (Yes bank in our example), they will inspect the MICR data, signature on the scanned image and release the money to SBI.
- This process is faster and more safer than the conventional paper-cheque clearing method.
How to Know if my Chequebook is CTS 2010 Compliant or Not?
Have a look at the way to identify if the chequebook is CTS 2010 compliant or not. If CTS 2010 is visible means that your chequebook is compliant and you need not worry. CTS 2010 is visible on the left side of the cheque near tearable portion of the cheque.
Implications for the Banks for Undertaking CTS 2010 Guidelines
- Banks need to buy scanners.
- Banks need to install special software provided by RBI, to securely transfer and receive the scanned image and data.
- Banks need to employ technology to change the color-scheme of chequebooks so that signature and handwriting is visible in the scanned image.
Benefits of Whole Exercise for Conversion to CTS 2010
- Time, money and manpower is saved as no physical movement of cheques (from banks to clearing house).
- Reduction in time for credit of cheques as CTS 2010 leads to faster clearing which means that better service to customers.
- Cheque Truncation system reduces the scope for clearing-related frauds.
- There is no fear of losing cheque in transit.
What is Your Action Required?
It is in your interest that you get your chequebooks demanded from the bank in case the chequebooks are CTS 2010 compliant or not. After 31 Dec 2012, consumer will be at the mercy of the bank to get his old cheque cleared. You can check more information on CTS 2010 as sent by Yes bank to its clients by clicking the given link. You can also check out MICR Code in a Cheque as this terms keeps haunting the consumers very often.