Get ready for new cheque system

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George Mathew: Nov 07 2012, 00:54 IST

Cheque transactions are going to be faster, less risky by the end of this calendar year. All banks including regional rural banks and co-operative banks will have to compulsorily switch over to the new Cheque Truncation System (CTS) from December 31, 2012. The implications are huge for the banking system that deals with up to 6 million cheques valued at about Rs 50,000 crore daily. For instance, RBI data shows that 107 million cheques worth Rs 7,81,300 crore traveled through the clearance centres in August 2012.

From the New Year, banks will accept only CTS 2010 standard cheques at their counters. This would means borrowers who had given post-dated cheques to finance companies and housing finance firms for their monthly loan repayments will have to replace their current cheques with CTS 2010 cheques. The RBI had already directed banks to issue only multi-city and payable at par CTS-2010 cheques to customers from September 30, 2012. Delhi including the NCR and Chennai will see the least impact as banks here are already on the new platform. This is the reason why no cheques can carry an alteration now even when signed by the customer.

CTS-2010 is essentially a collection of standards that make all cheques from every bank largely homogeneous. They carry some common basic features that help the banks where a customer deposits a cheque to identify the genuineness of the instrument. Bankers say the homogeneity in security features act as deterrent against frauds, and the fixed field placement

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