E-cheques to Pace up Clearance



E-cheques to Pace up Clearance

“Get a cheque cleared in one day” This is not an illusion.

In Mumbai, Faster clearance will soon be  possible by using an e-cheque, which is an image of the real one. Cheques will not have to be physically moved from the collection centre to the clearance centre, reducing both time and cost.

Its called“The cheque truncation system (CTS)” and is globally accepted. For the last five years, the Reserve Bank of India has been working on implementing CTS to replace the current magnetic ink character recognition (MICR) technology, which requires physical movement of cheques.

Using CTS, if a cheque is deposited at a bank branch today, it will be cleared the next afternoon, instead of the three days as it takes now.

The system was on a one-month pilot run in the National Capital Region and recently went live there. A total of 72 branches of State Bank of India, Bank of India, Punjab National Bank, Syndicate Bank, ICICI Bank, Standard Chartered Bank, Bank of America, and Karur Vysya Bank in Delhi have adopted the system.

Now the RBI planning to implement it in Mumbai and then in Chennai.

 After the application of this system clearance of cheques would be faster and will scale up. A huge digital database to preserve these cheques  for up to eight years has to be created by the Banks.

 




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Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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