Following the success of the pilot cheque truncation system (CTS) project in the National Capital Region, the Reserve Bank of India is planning to expand the same to other centres in the country as well.
The RBI is planning to expand CTS outside the NCR to 6-7 other centres as well, said Ms Shyamala Gopinath, Deputy Governor, RBI. At present, around 70 per cent of the cheques by volume in NCR are cleared through the CTS. CTS would next be implemented in Chennai, she said while addressing the Banking Tech summit organised by the Confederation of Indian Industry.
Truncation is the process of stopping the flow of the physical cheque issued by a drawer to the drawee branch. The physical instrument is truncated at some point en-route to the drawee branch and an electronic image of the cheque is sent to the drawee branch along with the relevant information such as the MICR fields, date of presenting and so on. The need to move the physical instruments across branches is done away under CTS thereby reducing the time required for payment of cheques, the associated cost of transit and delay in processing etc., leading to speeding up the process of collection or realisation of the cheques.
Cheque truncation speeds up collection of cheques and therefore enhances customer service, reduces the scope for clearing related frauds, minimises cost of collection of cheques, reduces reconciliation problems, eliminates logistics problems etc.
There is a need to integrate the high value cheques to the electronic mode, the Deputy Governor said and added that the RBI is planning to bring out an approach paper soon to find out ways for the integration.
Source:-Business Line(25-Mar-09)
The RBI is planning to expand CTS outside the NCR to 6-7 other centres as well, said Ms Shyamala Gopinath, Deputy Governor, RBI. At present, around 70 per cent of the cheques by volume in NCR are cleared through the CTS. CTS would next be implemented in Chennai, she said while addressing the Banking Tech summit organised by the Confederation of Indian Industry.
Truncation is the process of stopping the flow of the physical cheque issued by a drawer to the drawee branch. The physical instrument is truncated at some point en-route to the drawee branch and an electronic image of the cheque is sent to the drawee branch along with the relevant information such as the MICR fields, date of presenting and so on. The need to move the physical instruments across branches is done away under CTS thereby reducing the time required for payment of cheques, the associated cost of transit and delay in processing etc., leading to speeding up the process of collection or realisation of the cheques.
Cheque truncation speeds up collection of cheques and therefore enhances customer service, reduces the scope for clearing related frauds, minimises cost of collection of cheques, reduces reconciliation problems, eliminates logistics problems etc.
There is a need to integrate the high value cheques to the electronic mode, the Deputy Governor said and added that the RBI is planning to bring out an approach paper soon to find out ways for the integration.
Source:-Business Line(25-Mar-09)
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