Entire process flow in Cheque Truncation System - CTS..!

In Cheque Truncation System (CTS), the presenting bank (or / its branch) captures the data (on the MICR band) and the images of a cheque using their Capture System (comprising of a scanner, core banking or / other application) which is internal to them, and have to meet the specifications and standards prescribed for data and images.

To ensure security, safety and non repudiation of data / or  images, end to end PKI (Public Key Infrastructure) has been implemented in CTS. As part of the requirement,  the collecting bank (presenting bank) sends the data & captured images duly signed and encrypted to the central processing location (Clearing House) for onward transmission to the paying bank (destination or /  drawee bank).

For the purpose of participation the presenting & drawee banks are provided with an interface / or gateway called the CHI (Clearing House Interface) that enables them to connect & transmit data and images in a secure and safe manner to the CH (Clearing House).

The CH processes the data, arrives at the settlement figure & routes the images and requisite data to the drawee banks. This is called the presentation clearing. The drawee banks through their CHIs receive the images & data from the CH for payment processing. The drawee CHIs also generate the return file for unpaid instruments, if any.

The return file / or data sent by the drawee banks are processed by the Clearing House in the return clearing session in the same way as presentation clearing and return data is provided to the presenting banks for processing. The clearing cycle is treated as complete once the presentation clearing and the associated return clearing sessions are successfully processed.

The entire essence of CTS technology lies in the use of images of cheques (instead of the physical cheques) for payment processing.

Type of cheques can be presented for clearing through CTS..!

All types of cheques can be presented for clearing through CTS. It is no different from the use of traditional clearing infrastructure for clearing paper cheques.

Cheques presented as part of Speed Clearing are handled in CTS as well. Incidentally, given the fact that images of cheques (and not the physical cheques) alone need to move in CTS, it is possible for the removal of the restriction of geographical jurisdiction normally associated with the paper cheque clearing.

For reaping this benefit , the concept of Grid CTS clearing is being envisaged as part of roll-out of CTS at Chennai. Under the grid clearing, cheques drawn on centres included in the grid will be cleared as part of local clearing.

Src: RBI 

Share: