The Reserve Bank of India (RBI) logo is displayed outside the central bank in Mumbai, India, on Tuesday, March 3, 2020. RBI Governor Shaktikanta Das said he's ready to act to shield the economy from the coronavirus and reiterated there's room to cut interest rates if needed. Photographer: Kanishka Sonthali/Bloomberg | Photo Credit: KANISHKA SONTHALI
The Reserve Bank of India (RBI) has asked banks to extend Cheque Truncation System (CTS) across all their branches in the country.
This is aimed at leveraging the availability of CTS and providing uniform customer experience, irrespective of location of her/his bank branch
Cheque truncation involves the stoppage of the physical movement of the cheque and the replacement of physical instrument by the image/s of the instrument and the corresponding data contained in MICR (Magnetic Ink Character Recognition) line.
The RBI directed banks to inform it about their roadmap to achieve pan-India coverage of CTS and submit a status report before April 30, 2021.
“To facilitate this (CTS), banks shall have to ensure that all their branches participate in image-based CTS under respective grids by September 30, 2021.
“They are free to adopt a model of their choice, like deploying suitable infrastructure in every branch, or following a hub and spoke model, and concerned banks shall coordinate with the respective Regional Offices of RBI to operationalise this,” said the RBI in a circular.
The central bank observed that CTS has been in use since 2010 and presently covers around 1.50 lakh branches. All the erstwhile 1219 non-CTS clearing houses (ECCS centres) have been migrated to CTS effective September 2020.
“It is, however, seen that there are branches of banks that are outside any formal clearing arrangement and their customers face hardships due to longer time taken and cost involved in collection of cheques presented by them,” the circular said..
Published on March 15, 2021
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