What is Cheque truncation system and its benefits?

What are the benefits of Cheque Truncation? It 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.

What is called CBS and CTS explain?

Core Banking System (CBS) Micro Finance (mFIN) Cheque Truncation System (CTS) Anti Money Laundering.

What does truncated mean in banking?

According to the Merriam-Webster dictionary, the word truncate means to shorten, as if by cutting off. In the banking and finance industry, check truncation is the terminology used to describe the physical removal of paper checks from payment and deposit processes.

Why Cheque truncation is used in India?

Cheque Truncation System (CTS) is a process of clearing cheques electronically rather than processing the physical cheque by the presenting bank en-route to the paying bank branch. It is a step undertaken by the Reserve Bank of India (RBI) for quicker cheque clearance.

When did Cheque truncation started in India?

Background This new system of cheque clearing was first introduced on a pilot basis by the RBI in New Delhi on February 1, 2008. CTS was then launched in 2011 in Chennai. It was then launched as a nation-wide system from August 1, 2013 after the various benefits of the scheme were analysed.

What is true of CTS Cheque truncation system?

Cheque Truncation System (CTS) is a cheque clearing system undertaken by the Reserve Bank of India (RBI) for quicker cheque clearance. As the term proposes, truncation is the course of discontinuing the flow of the physical cheque in its way of clearing.

What is Fullform of Nach?

NACH (National Automated Clearing House) is a funds clearing platform set up by NPCI (National Payments Corporation of India) similar to the existing ECS of RBI.

What is MICR code in passbook?

MICR code is a code printed on cheques using MICR (Magnetic Ink Character Recognition technology). This enables identification of the cheques and which in turns means faster processing. An MICR code is a 9-digit code that uniquely identifies the bank and branch participating in an Electronic Clearing System (ECS).

What is an example of truncation?

Truncation is a searching technique used in databases in which a word ending is replaced by a symbol. For example: If the truncation symbol is *, then the truncated word, laugh*, will search for results containing laugh, laughter, laughing etc. Note: Placing the truncation symbol too soon in a word should be avoided.

What is the meaning of truncation?

1 : to shorten by or as if by cutting off. 2 : to replace (an edge or corner of a crystal) by a plane. truncate. adjective.

What is meant by truncation definition?

1 : to shorten by or as if by cutting off. 2 : to replace (an edge or corner of a crystal) by a plane.

What do you mean by CTS?

Cheque Truncation System
Cheque Truncation System (CTS) is a cheque clearing system undertaken by the Reserve Bank of India (RBI) for faster clearing of cheques. Instead, an electronic image of the cheque will be sent along with relevant information.

What are disadvantages of cheque truncation?

While Cheque Truncation provides a variety of benefits, it has its own set of disadvantages: Costly to implement: Implementing a Cheque Truncation system in a country requires the participation of all regional banks. The cost of implementing such a system can be significant.

What do you mean by cheque truncation?

Cheque truncation ( check truncation in American English) is a cheque clearance system that involves the digitalisation of a physical paper cheque into a substitute electronic form for transmission to the paying bank. The process of cheque clearance, involving data matching and verification, is done using digital images instead of paper copies.

What is cheque truncation system and its benefits?

What are the benefits of Cheque Truncation? It 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.

What is the clearing time for a cheque?

The time taken to complete the check-clearing process varies. Typically, it should take up to five working days for the written check to hit the receiver’s account. There are instances where the payment cannot be honored.