After extending the deadline for withdrawal of the residual non-Cheque Truncation System (CTS) 2010 standard cheque from March 31 to July 31, 2013, the Reserve Bank of India (RBI) has now introduced separate clearing session at three CTS centres of Mumbai, Chennai and New Delhi for clearing residual non-CTS 2010 instruments, including post-dated and EMI cheques with effect from January 1, 2014.
The separate clearing session will initially operate thrice a week Monday, Wednesday and Friday up to April 30, 2014. After that, the frequency of such separate sessions will be reduced to twice a week up to October 31, 2014 (Monday and Friday) and, then, from November 1, 2014, once a week every Monday.
The central bank has notified that if the identified day for clearing non-CTS 2010 instruments fall on a holiday under the Negotiable Instruments Act, 1881, the non-CTS cheques can be presented the previous day.
After the commencement of a special session for non-CTS 2010 standard instruments, drawee banks will return the non-CTS 2010 instruments presented at the regular CTS clearing. The returned cheques will have to be presented by the collecting bank in the immediate next special clearing session for non-CTS 2010 instruments.
The central bank has said that banks should educate and notify their customers of the likely delay in realisation of non-CTS 2010 standard instruments. Also, the bank?s cheque collection policies should also be notified suitably to reflect the change and put in place appropriate arrangement for handling customer complaints.
The CTS is an online image-based cheque clearing system where cheque images and Magnetic Ink Character Recognition (MICR) data are captured at the collecting bank branch and transmitted electronically. The RBI, in a circular, had
emphasised that the homogeneity in security features will act as a deterrent against cheque frauds, while the standardisation of filed placements on cheque forms would enable straight-through-processing both under CTS and MICR clearing.
The technology was first introduced in the national capital region and, subsequently, in Chennai. The cheque images captured at the presenting bank are transmitted to the clearing house for onward transmission to the payee or drawee bank. It is the responsibility of the drawee bank to capture the inward data and images and generate the return file for unpaid instruments.
The electronic image of the cheque is sent to the drawee branch along with the image of the deposit slip, which is clipped with the cheque by the customer. CTS reduces the scope for clearing-related frauds and minimises the cost of collection of cheque. For the bank, the benefits would be immense, which would help them to introduce new products and optimise resources.
