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If your cheques are not CTS 2010 complaint, there can realisation delays, as they will be cleared at less frequent intervals.
With banks continuing to accept old format cheques, customers who are not familiar with the CTS 2010 (Cheque Truncation System) cheques seem not to worry much about surrendering their old cheque books.
From May 1, the frequency of clearing such instruments would be reduced from the present three sessions a week to two.
Many banks have still not asked their customers to surrender the non-CTS 2010 cheque books to reflect the change, a cross-section of bankers told this correspondent, adding ‘the purpose of the banking regulator’s notification would stand defeated if banks themselves continue to issue non-CTS drafts.’
It may be recalled that the Reserve Bank had instructed all banks to implement the Cheque Truncation System across the country by March 2013.
A year has passed, but its implementation is yet to fall in place.
The RBI had, in the meantime, notified that the existing cheque clearing arrangement would continue for some more time, with an underlying note that banks should make efforts to withdraw the non-CTS standard cheques from circulation.
The deadline for withdrawal was initially fixed for July 31, 2013. Since large volumes of non-CTS cheques continued in circulation, the RBI allowed the clearing arrangement to continue for five sessions a week till December 31.
However, from January this year, the clearing arrangement for the non-CTS instruments was reduced to three sessions a week.
This is expected to be reduced to two sessions a week (Monday and Friday) from May 1. “Clearing such instruments at less frequent intervals will further delay its realisation. Banks have to educate its customers to return the non-CTS cheques and on its part issue only CTS-compliant draft,” an industry insider told this correspondent.
Asked how the customer would stand to lose apart from the delay in realisation of the proceeds of the non-CTS standard cheque, the banker explained ‘the physical movement of cheques is eliminated under the CTS system and with it the delay in presenting the instrument at the clearing house. CTS helps in speedy clearance and faster credit to the account holder’s account’.
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