Check your cheque
status, only those in new format will be accepted from 1st April 2013.
Recently you must
have noticed advertisements in newspapers put up by banks urging account
holders to stop circulating non-CTS compliant cheques and replace their old
cheque books with new CTS enabled ones.
Some banks also
created awareness through various modes of communication like SMS alerts,
letters, display boards in branches and ATMs, pop-up messages in internet
banking and notification on website. All this is because we are moving from an
old format to a new format of cheque clearance in India.
With the
implementation of the new Cheque Truncation System (CTS-2010), you will not be
able to use your old cheques from 1st April 2013.
The new Cheque
Truncation System (CTS-2010) will eliminate physical movement of cheques for
clearing. Instead, only their electronic images, along with key information,
will be captured and transmitted.
It will make the
clearing process more efficient, secure and quicker.
What you need to do
CHECK YOUR CHEQUE'S
STATUS
If you have ordered
your cheque books recently, say, a month ago, you may have already received
CTS-compliant cheque leaves, since most banks have already migrated to the new
system.
However, if you
have received the cheque book more than two or three months ago, you need to
run a status check. For instance, the compliant ones will have the
new rupee symbol inscribed near the numerical 'amount' field.
The CTS-compliant
cheque leaves will have the "Please sign above" mentioned on the
cheque leaf on the right had side bottom; and, void pantograph (wavelike
design) is embossed on the left hand side of the CTS cheque leaf.
GET YOUR OLD CHEQUE
BOOKS REPLACED
If you haven't
received the new form of cheque books already, speak to your bank immediately.
Banks will not
charge any fee for replacing the old cheque leaves.
ISSUE NEW
POST-DATED CHEQUES FOR EMIs
If you have issued
post-dated cheques (PDCs) for your home or auto loan EMIs, you will have to
issue fresh cheques.
For those of you
who have opted for the ECS (electronic clearing system) mode for EMI payments
the new system will not have any impact.
BENEFITS TO ACCOUNT
HOLDERS
Since there is no
physical movement of cheques, there is no fear of loss of cheque in transit.
Usage of CTS cheques also means quicker clearance, shorter clearing cycle and
speedier credit of the amount to your account. Depending on whether the cheque
is local or outstation, the cheque can get cleared on the same day or within 24
hours.
The biggest
advantage is that CTS-compliant cheques are more secure than old cheques and,
hence, less prone to frauds. Also, as the system matures, it is proposed to
integrate multiple locations and reduce geographical restrictions in cheque
clearing.
Hence, there are
chances of multi-city cheques getting cleared on the same day, going forward.
BENEFITS FOR BANKS
- ·
Shorter clearing cycle.
- ·
Superior verification and reconciliation process.
- ·
No geographical restrictions as to jurisdiction.
- ·
Operational efficiency for banks and customers alike.
- ·
Reduction in operational risk and risks associated with paper
clearing.
Also, to reiterate,
scope for frauds are minimum under the CTS regime, which is good for banks. In
addition to this, obviating the need to move physical cheques is extremely
beneficial in terms of saving cost and time for banks. Certain benchmarks
across the country have been prescribed like quality of paper, watermark,
bank’s logo in invisible ink, void pantograph, etc, and standardization of
field placements on cheques. This will achieve standardization of cheques
issued by banks.
