Cheque truncation system to provide a more efficient, secure and fast clearing process
Cheques issued by any bank needs to be compliant with cheque truncation system (CTS) 2010 standards, according to RBI (Reserve Bank of India) guidelines. CTS-2010 is a benchmark for standardisation of cheques issued by banks across the country. Banks have been asked to ensure all cheques are compliant with CTS-2010 standards by April 1, 2013. Thus, non-CTS cheques would not be used after 31 March 2013.
The main feature of CTS-2010 cheques is that a cheque can be cleared electronically. A CTS-2010 cheque will not have to go through the process of physical clearance. When a customer deposits a CTS-2010-complied cheque, the bank can simply send the cheque’s image to the drawee bank, whose cheque has been issued; once the drawee bank scrutinises and recognizes the cheque, it will get cleared. This move will help banks save on transaction cost and time.
How to identify if your cheques are CTS 2010 compliant?
- Bank/branch address with IFSC code will be printed on the top left corner of the cheque.
- Standard date format.
- Printer name along with ‘CTS 2010’ printed on the extreme left of the cheque.
- Bank logo on the centre of the cheque.
- ‘Please sign above’ is mentioned on the bottom right corner of the cheque.
- Rupee symbol () in the amount column
The CTS 2010 cheque has bank’s logo printed with invisible (ultra violet) ink. The logo is at the center of the cheque and can be visible in ultra violet-enabled scanners / lamps. It establishes genuineness of a cheque.
In case if your CTS 2010 cheque book, you must obtain a new CTS complied cheque book, and surrender the non-compliant one to the bank. If you have availed a home or auto loan and issued post-dated cheques instead of opting for direct debit, you need to replace such post-dated cheques with the CTS-2010 compliant ones after March 31, 2013. To avoid this hassle, you can also switch to the direct debit / ECS (electronic clearance service) mode where the EMI (equated monthly installment) amount would be debited from your account every month.
What are the benefits of CTS 2010
Faster Clearing: CTS 2010 will eliminate the physical movement of cheques for clearing by transmitting the electronic images of the cheques, ensuring more efficient, secure and quicker processing of your cheques.
Security: The new security features in CTS 2010 cheques make it easy for banks to confirm the genuineness of the cheques presented for clearing.
Safety against frauds: The enhanced security features of the new cheque format would act as a deterrent against frauds in your accounts.
A majority of the banks have been issuing CTS-2010 cheques as of now. The new cheque standard 'CTS 2010' with set of minimum security features would ensure uniformity across all cheque forms issued by banks in the country and also help presenting banks while scrutinising and recognising cheques of drawee banks in an image-based processing scenario.
The introduction of new cheque standards ‘CTS 2010’ was needed on account of several developments in the cheque clearing namely growing use of multi-city and payable-at-par cheques at any branch of a bank, increasing popularity of speed clearing for local processing of outstation cheques and implementation of grid based CTS for image-based cheque processing, etc.