Reserve Bank of India, proposes to extend Cheque Truncation System (CTS) across all bank branches in the country.
On 5th Feb 2021, vide its circular on “Statement on Developmental and Regulatory Policies RBI had announced about pan-India coverage of CTS, by bringing all branches of banks in the country under image-based CTS clearing mechanism.
The CTS is in use since 2010 and presently covers around 1,50,000 branches. All the erstwhile 1219 non-CTS clearing houses (ECCS centres) have been migrated to CTS effective September 2020. It is, however, seen that there are branches of banks that are outside any formal clearing arrangement and their customers face hardships due to longer time taken and cost involved in collection of cheques presented by them.
In order to leverage the availability of CTS and to provide uniform customer experience irrespective of location of a bank branch, it has been decided to extend CTS across all bank branches in the country. To facilitate this, banks shall have to ensure that all their branches participate in image-based CTS under respective grids by September 30, 2021. They are free to adopt a model of their choice, like deploying suitable infrastructure in every branch or following a hub & spoke model, etc. and concerned banks shall coordinate with the respective Regional Offices of RBI to operationalize this.
RBI has also advised banks to inform to the mail id firstname.lastname@example.org the roadmap to achieve pan-India coverage of CTS and submit a status report before April 30, 2021. RBI confirms that this directive has been issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007).