India's largest lender the State Bank of India (SBI) will
implement the cheque truncation system (CTS) 2010, the new standard of cheques
as mandated by the Reserve Bank of India; from January 01, 2013. The measure is
primarily aimed at serving duel objectives: preventing frauds related to cheque
and speedy clearing of the same.
"All the customers of State Bank of India are hereby
informed that as per directive issued by the Reserve Bank of India, for
standardization and enhancement of security features in cheque form and its
migration to 'CTS-2010' standard, all branches of our bank will now issue only
'CTS-2010' standard cheques to their customers," the banking behemoth on
Monday said in a public notice.
With this, the bank will not accept all the non-CTS cheques
(that you issue from your existing cheque book) and those will be out of
circulation from December 31, 2012. Hence, the existing customers are now
required to surrender their existing cheque book and ask for CTS-2010
benchmarked cheques.
This move is a kind of alternative to physical cheque
clearing. Some key security features are added to it. Now, the paying bank will
send the scanned image of a cheque instead of physically presenting it. This
form of cheques will prevent fraudulent activities as well. Cheques cannot be
altered under this new system. All SBI group banks too will introduce it from
January 01, 2013.
SBI's move is widely expected to prompt other big banks to
execute the new process. Some foreign and private sector banks already
commenced the process of migration from the existing to new standard. According
to a spokesperson at SBI, the bank may issue further clarification on Tuesday
in this regard.
Earlier in December, 2011; RBI had issued a notification
relating to the implementation of CTS 2010 standard.
The introduction of new cheque standards 'CTS 2010' was
warranted on account of several developments in the cheque clearing viz.
growing use of multi-city and payable-at-par cheques at any branch of a bank,
increasing popularity of speed clearing for local processing of outstation
cheques and implementation of grid based cheque truncation system (CTS) for
image-based cheque processing
What is cheque truncation?
Cheque truncation system (CTS) was implemented by RBI at New
Delhi Bankers Clearing House on a pilot basis. Chennai of late, too executed
the same process.
Cheque truncation, according to National Payment Corporation
of India (NPCI) is the process in which the physical movement of cheque within
a bank, between banks or among banks and the clearing house is curtailed or
eliminated, being replaced in whole or in part, by electronic records of their
content (with or without the images) for further processing and transmission.
