CTS – 2010 Cheques Information

What is Cheque Truncation System (CTS – 2010):  

Simply put, CTS is a process that will give banks the freedom to avoid transporting a physical cheque from the presenting bank (where the cheque is deposited) to the drawee bank (where it is issued). As per the CTS, instead of a physical cheque, an electronic image of the cheque will be sent to the drawee bank. Of course, this image will have all the necessary information needed to process the cheque. Right from the nine-digit MICR code, the date of the cheque and the details of the presenting bank, like branch, etc.

What’s the big deal about it

Faster: Since the cheque will not actually move from one location to another, the time needed to clear the cheque will be lesser. So, if an inter-city cheque takes anywhere from three to seven days (at time more) to get cleared, with CTS it will take a maximum of a couple of days; at times, even it might get cleared the same day.

Curtail Loss: When a cheque has to be moved physically, it can get damaged or worse even get lost in transit. CTS would take care of such issues.

What should you do:

Request: First get in touch with your bank, give them the Non-CTS cheques for cancellation and request the new kind of cheques. That is, CTS 2010 standard cheques.

Ink: Also, keep in mind that going forward, when you write the cheque you should use darker ink so that your signature is captured by the software properly.

Be careful: Also, when you fill the cheque you will need to be extra careful. If you make any alterations in the cheque, your cheque will simply not be cleared; this is to ensure that the risk of fraud is reduced. Which means you will have to use a new cheque leaf if you make a mistake. And the fact that many banks are charging for extra cheques means you might just have to bear the extra cheque costs too.

The RBI plans to have this new system implemented across all banks. So get yourself at least one pen with darker ink.