Financial Daily from THE HINDU group of publications
Friday, Sep 23, 2005
Financial Daily from THE HINDU group of publications Friday, Sep 23, 2005 |
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Money & Banking
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Information Technology Banks asked to finalise vendors for cheque truncation by Oct Our Bureau
Mumbai , Sept. 22 THE Reserve Bank of India has asked banks to finalise vendors for their Cheque Truncation Systems by October. Cheque Truncation System (CTS) allows transferring the electronic image instead of physical movement of the cheques. RBI is likely to begin live testing of CTS in Delhi by January or February 2006 and roll out the pilot project by March 2006, said Mr Kaza Sudhakar, General Manager and in-charge of the Products and Developments Division of the Payments Department, RBI. Mr Sudhakar was speaking at the Banknet seminar on information technology business benefits in banks. The process of cheque truncation reduces the clearing time and also cost involved in physically sending the cheques. Mr Sudhakar said that eventually only two major fund transfer products will remain, the National Electronic Fund Transfer (NEFT) for low value or retail transfers and Real Time Gross Settlement for high value transfers. Other payment types such as like SEFT (Special Electronic Fund Transfer) would be migrated to NEFT by December, he added. Mr Sudhakar also said that banks must have at least one fund transfer product linked to Real Time Gross Settlement on their Web sitesAs electronic fund transfer products work out cheaper than legacy or traditional products, banks must charge lesser for these services, he added. Speaking about the security in case of technology, Mr G Padmanabhan, Chief General Manager and in-charge, Department of Information Technology, RBI, said that banks must look at Know Your Employee norms. Wherever there is an employee related activity banks must have a good grasp of the employee's background prior to recruitment and even after that, he said.
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