Cheques play an important role in banking transactions. Not only
from being treated as an alternative to cash, cheques are used as instruments
of guarantee to the loan taken and other similar multifarious functions. With
such noticeable functions cheques perform, they are also prone to large scale
frauds. Not only to curtail these frauds, but also to get instant cash, new
cheques system CTS 2010 came into existence from 1st January 2013.
What is Cheque Truncation System 2010?
As per the earlier practice, when we present a cheque to the bank,
first the bank will send it to RBI; next, it goes to the cheque supplying bank
and when that bank says ‘Yes’, then only the amount will
be credited to your Account. For completing all these transactions, it takes at
least 2 days. The new system CTS – 2010 (Cheque Truncation System – 2010) has
stopped this system. From 1at January 2013, it would be enough if the
photos of the cheques are sent. It means that from now on, cheques travel
online and it facilitates faster clearance of cheques. It reduces the bank’s
administrative expenses and also saves time. Customers will get credit of the
amounts faster.
Then what is the difference?
Until now, banks used to design the cheques as per their choice.
They used to give prominence to the look and feel, quality of paper and print
of their cheques. As per CTS – 2010, all banks will have to follow the
specified uniform design.
*
The paper used for these new cheques should be of
good quality and should be well-suited for taking photos. Any corrections made
in them can be easily detected. They will not get damaged even if liquids spilled
on them.
* Like Mahatma Gandhi’s picture is printed in the white
space in the currency note, these cheques contain the symbol ‘CTS INDIA’.
It can be seen when light is focussed from behind on it.
*Bank’s name will be printed on the left side in the
cheque and it can be seen only using ultra-violet rays.
Earlier, we can attest any correction in the cheque with a
signature beside it. New cheques will not accept this practice; it puts a stop
to frauds.
* While indicating the location, where to sign; it will be
prominently printed on the cheque that it is acceptable nation-wide.
*
Cheques of all banks will be uniform in their design. Account number, name of the bank, Water Mark,
and the location where the cheque number is printed and other particulars will
be uniform for all banks.
Then what should we do?
Old cheques became invalid from 1st January 2013.
Therefore, if you have already issued cheques to anybody, get them back and
issue the new cheques, especially in case of repayment of loans. Note that in
case a cheque bounces back, unnecessarily you will have to pay a penal fee.
*
In case, you forgot the names of persons to whom
you issued the cheques, check-up the details recorded in the first page of the
cheque book. Try to issue new cheques to them; even otherwise, there will not
be any problem, since anyway the old cheques will become invalid.
If you are having old cheques with you …
Request the person, who issued the cheque to issue the new CTS –
2010 cheque. If you are still having unencashed cheques with you, deposit the
same into the bank immediately. Some banks are advising to return the old
cheques to them; if you have any, then return them and get new cheques.
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Nice post! Checking account holders must be aware that when you order bank checks online, you will be required to provide some sensitive personal and financial information. Thanks.
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The CTS eliminates the time, money and manpower wasted during physical movement of cheques (from banks to clearing house).Thus, Cheque Truncation =faster clearing = better service to customers,Cheque Truncation system reduces the scope for clearing-related frauds.There is no fear of losing cheque in transit.
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When purchasing checks online, you’ll need to provide your account number and routing number, which are usually printed on literature you received from your bank when you opened the account.
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