Cheque truncation system (cts)

Cheque Truncation System (CTS)
Cheque Truncation System: Cheque Truncation System (CTS), in India, is a project of the Reserve Bank of India (RBI), commenced in 2010, for faster clearing of cheques. 
Infrastructure Required- Point of Truncation:
Image
Cheque scanner
Hardware
Software
Network
WORKING OF CTS:In the earlier system, customer presented the cheque to the bank which sent the cheque to the clearing house, after which money would be credited to your account.
It usually takes 3-4 days for the physical transfer of cheques and amount to transfer.
CTS clears cheques electronically.
Physical transfer of cheques between banks has ended.
• Now it on average takes 1 day to clear and transfer the amount.
Process of CTS:The cheque is captured by the presenting bank (collecting bank) through a ‘Capture System’

An encrypted format to the ‘Clearing House’, from where it will be sent to the paying bank

A clearing House Interface, which is sort of a gateway.

Presentation Clearing’, which involves the process of data reading.

The payment is processed
Benefits of CTS:Benefits to customer:

No fear of loss of cheque in transit
Faster credit of funds to customer’s account
More secure
Lesser chances of fraud
Multi-city cheques could be cleared on the same day
Benefits of CTS:Benefits to Banks:

Reduction in cost of transit and errors to manual work
Verification will also be faster
Shorter clearing cycle
Operational efficiency
Reduction risks involving paper sharing
Thank you

1. Cheque Truncation System (CTS) NAME SANGITA CHINA DMT CONSULTING (P) LIMITED DATE 01-05-2021

2. Cheque Truncation System : Cheque Truncation System  ( CTS ), in India, is a project of the Reserve Bank of India (RBI), commenced in 2010, for faster clearing of cheques . 

3. Infrastructure Required- Point of Truncation  Image Cheque scanner Hardware Software Network

4. WORKING OF CTS: In the earlier system, customer presented the cheque to the bank which sent the cheque to the clearing house, after which money would be credited to your account . It usually takes 3-4 days for the physical transfer of cheques and amount to transfer. CTS clears cheques electronically. Physical transfer of cheques between banks has ended . • Now it on average takes 1 day to clear and transfer the amount.

5. Process of CTS: The cheque is captured by the presenting bank (collecting bank) through a ‘Capture System’ An encrypted format to the ‘Clearing House’, from where it will be sent to the paying bank A c learing House Interface, which is sort of a gateway. Presentation Clearing’, which involves the process of data reading. The payment is processed

6. CHEQUE TRUNCATION SYSTEM FORMAT

7. Benefits of CTS: Benefits to customer: No fear of loss of cheque in transit Faster credit of funds to customer’s account More secure Lesser chances of fraud Multi-city cheques could be cleared on the same day

8. Benefits of CTS: Benefits to Banks: Reduction in cost of transit and errors to manual work Verification will also be faster Shorter clearing cycle Operational efficiency Reduction risks involving paper sharing

9. LEGAL ISSUES INVOLVED The Negotiable Instrument Act, Information Technology Act  Verification KYC norms Verification of the signature and availability of funds Genuineness of the cheque . The physical instrument for verification

10. Conclusions: CTS is a move in the right direction and will ensure the efficiency, transparency, security and faster credit of funds benefiting both customer as well as bank. • Obstacles due to jurisdiction and geographical restrictions will reduce and customer can get quick access to his funds.