IPCI Info

Cheque Truncation System(CTS)

Cheque Truncation truncation is the process of stopping the flow of the physical cheque. In its place an electronic image of the cheque is transmitted to the paying branch through the clearing house, along with relevant information like data on the MICR band, date of presentation, presenting bank, etc.

Benefits of Cheque Truncation:
It speeds up the process of collection of cheques resulting in better service to customers,
reduces the scope of loss of instruments in transit,
lowers the cost of collection of cheques, and
Removes reconciliation-related and logistics-related problems, thus benefitting the system as a whole.
CTS 2010 is a cheque truncation system, an image-bound method, for faster clearing of cheques. Truncation means conversion of a physical cheque into electronic form. As per RBI guideline, all banks providing cheque facility to their customers have been advised to issue only ‘CTS-2010’ standard cheques.

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