CTS Compliant Cheques

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 1^st 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.