Punjab National Bank has introduced cheque truncation system in its clearing cells at Ernakulam, Thiruvananthapuram and Thrissur.
Mr K.V. Rajesh, deputy general manager and circle head, said that PNB is the first public sector bank to introduce this facility in India.
In the present system of MICR cheque clearing, cheques are required to be physically moved from place to place and presented at the branch where they are payable. Under the cheque truncation system, images of the instruments and the corresponding data contained in MICR line is captured and used for settlement amongst banks and payment of cheques, he said.
Under the MICR clearing, though the proceeds of the cheque are available to the beneficiary on the second working day, the same can be withdrawn/used only on the third working day. Under the cheque truncation system, the proceeds are available for use on the second day.
As per the cheque truncation system, there will be only one clearing in South India based at Chennai. All the clearing houses in Kerala and other southern States will be connected to RBI clearing cell at Chennai. Thus the cheque clearing process will be quicker and more effective, he said.
In due course, with of multiple clearing sessions taking place in a day, the funds will be available to customers on the day of deposit of cheques, Mr Rajesh said.