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Value added services with CTS

Value added services with CTS

  • Integrating the image archive to interface with the Internet banking application can allow the retail customers of the Bank to view their paid cheques over the Web and print the same for their records. This provides the bank with an opportunity to generate additional revenue by charging a fee to the customers availing this service.
  • The Banks’ can install a cheque deposit kiosk which can provide the customer with a receipt containing both the image of the cheque deposited as well as the details entered by the customer on the cheque.
  • The above value added service can also be thought of being provided through the ATM.
  • The Bank can also have an interface with the SMS service of the cellular phone providers. Using this service the bank can automatically send SMS messages to their customers advising them of cheques being identified for return in the day’s clearing. This service can be provided in a real-time scenario and would ensure that lesser cheques are returned via clearing.
  • The other benefit can be that the Bank can increase the time for the cheque collection process as the activities of cheque truncation and imaging will take much lesser time than manual process. This would facilitate sending the cheques deposited for clearing even after the stipulated time.

RBI’s Initiative in Cheque Truncation System – 2010

The RBI set up a working group on Cheque Truncation and e-cheques, which studied the Truncation and Imaging processes of other countries and came out with the following recommendations:-

  • In India the cheques should be truncated at the presenting bank itself and there should not be any amount based restriction.
  • An electronic image based model will be the mode of truncation.
  • The storage requirement of the electronic image of physical cheques is necessary and the preservation period should be eight years.
  • Truncation and standardization of cheque format are seen as independent initiatives with the latter being implemented even after the introduction of cheque truncation. Therefore, currently the settlement should be on the basis of the current structure of the MICR fields.
  • Public key infrastructure (PKI) to be adopted to protect data and image flow over the network. Digital signatures should be used to establish authenticity, non-repudiation and integrity
  • The security requirements for the storage of images by the banks or the centralized warehousing agency should be in consonance with the requirements of the IT Act 2000.
  • From the point of view of efficiency and control, RBI is planning to set up a centralized clearing system and a central warehouse in Delhiwhere a single agency or individual drawee bank can act as the points of storage.

Keeping all these points in minds, RBI has already floated a RFP to various vendors to provide it with an all-inclusive technology for cheque truncation. It has plans of starting the Project in the National Capital Region by July 2005 and then rolling it out to other metros. The overall aim being to eliminate physical transfer of cheques in the peak centers in the next two years time.