New Delhi: The Reserve Bank of India (RBI) has directed all banks to implement the Cheque Truncation System (CTS) at all their branches by September 30, 2021. This will speed up cheque clearance in the country. The system started in 2010 but has been implemented only in 150,000 branches so far. But now, as per the new RBI directive, the system has to be implemented in all branches of all banks.
In a circular sent to the Chairman and Managing Director of all banks, RBI has directed that "It has been observed that many branches of banks have been excluded from any formal clearing system. Because of this, their customers are facing difficulty, as time is high and the collection of cheques also costs more. In order to enhance the reach of CTS and provide a uniform customer experience to customers across the country, all banks must ensure that image-based CTS is implemented in all their branches by September 30, 2021."
Check truncation system is a process of clearing cheques. The physical check issued does not have to be rotated from one place to another but is cleared only by taking a cheque photo. In fact, in the old system, the payer travels to the bank branch from the bank where the cheque is offered. That's how it takes time to clear.
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