- May 2014
- December 2013
Ruby Jacob, 19 Mar 2013
You have time till 31 July 2013 to get new cheque books conforming to RBI's CTS-2010 standard. The RBI has notified that old cheques will continue to be valid and accepted until the four months till July. Banks have been directed to issue new cheque books to customers free of cost by then.
RBI rules for Cheque Truncation System (CTS)
Cheque Truncation System (CTS) 2010 is a set of new standards for cheques introduced by RBI in 2010 to speed up and smoothen cheque clearing system in the country. With most banks adopting Core Banking Solution (CBS) and the use of Payable-at-Par cheques by customers it became necessary for cheques to have additional features that would help in faster and safer clearing.
A multi-city cheque or payable-at-par cheque can be paid at any branch of the bank without charge on the payee. With CBS this means that if your bank account is in Pune and someone with an account in Bangalore gives you a payable-at-par cheque, when you deposit that cheque at your bank you will receive the entire amount on the cheque and not be charged anything. Usually outstation cheques have charges for clearing and only local cheques are cleared for free.
Under CTS physical cheques will be retained by the presenting bank (your bank in the previous example) and will send an electronic image of it to the clearing house which then forwards it to the drawee bank (friend's bank). The presenting bank is supposed to preserve the physical cheque for 10 years.
Features of CTS-2010 cheques
CTS-2010 cheques have improved security features for prevention of misuse and frauds. These are easily identifiable. They will have a standardized watermark carrying the words CTS, visible when held against light. The bank's logo will be printed in invisible ink which will be seen UV lamps. There will be a void pantograph (wave-like design) which will generally be visible in all coloured scanned and photocopied images of the cheque but invisible at one particular resolution. Account number of current account holders will mandatorily printed in CTS-2010 cheques.
In addition CTS cheques have light or clutter-free background. Significant fields like payee's name, amount, and date would be placed in fixed areas as specified. This will help in data capturing techniques used in automated systems of banks. Except for date, no change or correction can be made in CTS cheques.
What if you have not got CTS cheques?
Although banks will continue to process old non-CTS cheques till July RBI has asked them to reject fresh post dated cheques for loan EMIs. You can make an ECS or NEFT mandate instead. Meanwhile you can request for CTS-2010 cheque from your branch. For first time issue of CTS the bank is not supposed to charge anything.