ChequeMan Blog

What is Cheque Standardization

From the past few years, banks have been adding certain patterns and designs on the cheques so as to increase the security of cheques and to prevent cheque misuse, tampering or alterations. However, due to excessive use of ‘at par payable’ cheques or multi city cheques, RBI has decided to standardize the cheques in terms of size, MICR band, quality of paper, etc for easier, secured and faster clearing.

Checklist: Moving to CTS – 2010 compliant Cheques – rbi

Following are the points to be remembered while shifting to the Cheque Truncation System:

• One should be using CTS – 2010 compliant cheques issued by bank from 1st April 2013.
• Use of DARK colored ink to write or print on cheques.
• Cheques drawn should be written or printed clearly and should be legible so that on scanning, the image can be read clearly.
• No overwriting or cancelling on the cheques is allowed.
• All post dated cheques that have been issued should be cancelled and reissued in CTS 2010 compliant cheque format.
• All the old cheques issued in non CTS compliant cheques should be cleared before 1st April 2013.

Benefits of CTS for Customers

The benefits of the Cheque Truncation System(CTS) for the customers are:

• Clearance cycle gets shortened : As CTS system is being implemented, the physical or manual movement of cheques for clearance has ceased. With cheques being transmitted electronically, the settlement process becomes quicker, facilitating reduction in the clearance cycle.

• Cheques will not be lost: The fear of loss of cheques during transfer from the collecting bank to the drawee or payee bank is eliminated.

• No geographical restrictions as to jurisdiction: Limitations of the current clearance system with respect to jurisdiction and geography are eliminated.

• Reduction in fraud: CTS helps reduce the scope of fraud significantly. Moreover, the electronic transmission is quick and allows early detection of fraud or any alteration with respect to the payee, amount or the issuer of the cheque. CTS prescribe minimum security features under “CTS-2010 standards” along with superior verification process that further facilitates in the reduction of frauds.

• Enhanced operational efficiency:The operational efficiency of both the bank as well as the customer is enhanced with the introduction of Cheque Truncation System.