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Cheque Truncation System or CTS 2010
by


Rajesh Goyal


What is Cheque Truncation System or CTS 2010 :

The full form of CTS is Cheque Truncation System. RBI has decided to launch this system and all
banks across India are required to follow RBI guidelines in this regard. As per RBI guidelines, now
all banks have to issue cheques conforming to the CTS 2010 standards with uniform features.


How is CTS 2010 will be different from earlier system of cheque clearance?

Under the CTS system, the physical movement of cheques between banks will be elminated. At
present , when you issue a cheque to someone, he has deposit the cheque in his bank to get credit.
Then this cheque moves physcially from his bank to your bank which involves a lot of time and
risk. Now under CTS, instead of physical movement of the cheque, an electronic image of the
cheque will be transmitted to the drawee branch / bank. The presenting bank will retains the
physical cheque. Along with the electronic image, certain key relevant information is also
transmitted, such as date of presentation, presenting bank details, data on the MICR band.


What is the purpose of CTS 2010 or What are the benefits of CTS?

The new process is being adopted to reduce the scope of frauds as the new standardized cheques
will have number of security features. The system will also help in speed clearance of chequess and
thus customers will be able to get faster credit to their accounts. This will happen as there will be no
physical movement of the cheuqes and hence time is saved and risk of loss of cheques in transit are
totally eliminated.
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When will the CTS begin ? :

RBI has decided that CTS will be effective from 1st April 2013 (earlier it was to start from 1st January
2013, but was postponed as some banks had not completed the job of issuing new cheque books to
all the customers)

What are the features of cheques issued under CTS ? :

(a) Cheque printer details: This is printed on the extreme left hand side of the cheque. The printer details
along with the words CTS-2010 is mentioned along the area where you tear off the leaf from the cheque book.

(b) Rupee symbol: The new symbol of the Indian rupee is printed beside the area where the amount in figures
needs to be written.

(c) Details of the bank and its logo: The bank details and its logo are printed on the face of the cheque.
However, it is printed in invisible ink.

(d) Signature space indicator: The words please sign above are mentioned indicating the space where you
will need to sign the cheque.

(e) VOID pantograph: This is a wavelike design, which is visible to the naked eye and seen below the area
where the account number is printed.

The above set of minimum security features would ensure uniformity across all cheque forms
issued by banks in the country which in turn will help presenting banks while scrutinising /
recognising cheques of drawee banks in an image-based processing scenario. The homogeneity in
security features is expected to act as a deterrent against cheque frauds, while the
standardisation of field placements on cheque forms would enable straight-through-processing by
use of optical / image character recognition technology.
The benchmark prescriptions are collectively known as "CTS-2010 standard". Indian Banks
Association (IBA) and National Payments Corporation of India (NPCI) are co-ordinating with the
banks on implementation of the new standard. Accordingly, the cheques issued are tested and
certified by NPCI and only after such cerification the cheques would be issued to the customers.


What Should Cheque Book Holders Should Do :

(a) You should ensure that you use only CTS-2010 compliant cheque leaves from April 1, 2013.
(b) You can check if you hold a CTS compliant cheque book by verifying if the cheque leaves have
the features mentioned above. You need to apply in your bank for the same and it is available free of
cost.
(c) If you have any unused cheque leaves with you, these must be surrendered in your bank.
(d) In case you have given old post dated cheques (like for your Housing Loan or Auto Loan) to some
body, you must exchange them with the CTS-compliant cheques immediately.


RBI has advised that though non CTS-2010 standard cheques will continue to be accepted post March
31, 2013, they will be cleared at less frequent intervals and may incur additional charges. RBI has
advised to preferably use dark coloured ink while writing CTS cheques.




You can give your feedback / comments about this Article. Please give only relevant comments as
irrelevant comments are waste of time for yourself and our other readers.


9 comments
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SONAM a day ago
DESPITE ALL SUCH MEASURES CAN IT HELP TO STOP FRAUDS
0
Reply
SONAM a day ago
what is all truncation about this CTS 2010
0
Reply
SONAM a day ago
AWESOME, MAUSAM
0
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s onam 3 days ago
respected sir,
can you give me some idea about po descriptive papers.
0
Reply
s onam 3 days ago
thanks sir,ur articles are so helpful for upcomming bank exams
0
Reply
Rama Kri s hna 3 days ago
Will you please mention RBI Circular No on CTS Cheques containing the guidelines?
0
Rama Kri s hna 5 days ago
The write-up is very useful.In the penultimate paragraph,it is written that CTS
Cheques are to be issued free of cost by the Banks.But the charges were debited to my Current
Account.When I took up the matter with Customer Service Cell of the Bank,they expressed
their inability to reverse the charges.RBI/IBA should give wide publicity that customers need
not pay any charges for CTS Cheques at least for first time issue.
0
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Lakhvi nder Si ngh Kahl on 6 days ago
Respected Goyal ji
I would request, if you can tell how the people living abroad can get the CTS 2010 cheque
books.
0
Raj es h Goyal 6 days ago Mod Lakhvinder Singh Kahlon
You can send a request to your bank for sending fresh cheque book, which will be
certainly CTS 2010 compliant. In case your bank has facility of putting up such a request
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