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Technology Behind Cheque Truncation Process

The technology used in cheque clearing process or technology behind the new cheque truncation process is as follows:-

  1. Cheques are kept in the presentation bank and are never sent to the Clearing House or to the drawer’s bank. The information on the cheque is encoded or read using MICR and then image processing technologies are used to convert cheque images to digital form.
  2. The image of the cheque is captured as it goes through the reader/sorter machine. This can be done by using either digital cameras to capture the digitized form of the front and back of the cheque or another alternative is by using a two-way digital scanner.
  3. The image is captured in the JPEG or GIF extension and can be preserved as images on a microfilm, an arrangement that permits signature verification should the need arise.
  4. During image compression the images should be of at least 100 dpi resolution so that the quality of the image is maintained.
  5. All cheques are stamped with serial numbers for use in potential inquiries. These should match with the number of the image.
  6. As most banks are gearing towards networked branches, Broadband and VPN could be the model adopted for providing connectivity. Dial-up or Leased Line can be used for transmission of MICR Codeline and images to the member banks via the Clearing House.
  7. JAVA based API can facilitate internal/external interactions with the archive. Browser based interface with which the customer can receive the cheque image  statements via e-mail to see when the cheque was written, to whom it was made out and when was it cleared, will be extremely beneficial in the long run.
  8. The Technology should allow Drawee Bank/branches to view the front and reverse of cheque images of individual instruments in a number of ways (flipped, rotated, turned or enlarged a particular field/section) using any standard browser interface.

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