The security, integrity, non-repudiation and authenticity of the data and image transmitted from the paying bank to the payee bank are ensured using the PKI (Public Key Infrastructure).
Cheque Truncation System (CTS) is compliant to the requirements of the IT Act, 2000. It has been made mandatory for the presenting bank to sign the images & data from the point of origin itself.
PKI is used throughout the entire cycle covering capture system, the presenting bank, the clearing house & the drawee bank. The PKI standards used are in accordance with the appropriate Indian acts and notifications of CCA (Controller of Certifying Authority)
What is Cheque Standardisation and what does CTS 2010 Standard mean ?
Standardisation of cheque forms (leaves) in terms of size, MICR band, quality of paper, etc., was one of the key factors that enabled mechanisation of cheque processing.
Over a period of time, banks have added a variety of patterns & design of cheque forms to aid segmentation, branding, identification, etc., as also incorporated therein a number of security features to reduce the incidence of cheque misuse, tampering, alterations, etc.
Growing use of multi-city & payable-at-par cheques for handling of cheques at any branches of a bank, introduction of Cheque Truncation System (CTS), increasing popularity of Speed Clearing, etc., were a few aspects that led to prescription of certain minimum security features in cheques printed, issued and handled by banks and customers uniformly across the banking industry.
A Working Group was set-up by RBI for examining further standardisation of cheque forms and enhancement of security features therein. Accordingly, certain benchmarks towards achieving standardisation of cheques issued by banks across the country have been prescribed such quality of paper, watermark, bank’s logo in invisible ink, void pantograph, etc., and standardisation of field placements on cheques.
In addition, certain desirable features have also been suggested to be implemented by banks based on their need and risk perception.
The set of minimum security features would not only ensure uniformity across all cheque forms issued by banks in the country but also help presenting banks while scrutinising / or recognising cheques of drawee banks in an image-based processing scenario. The homogeneity in security features is expected to act as a deterrent against cheque frauds, while the standardisation of field placements on cheque forms would enable straight - through - processing by use of optical / or image character recognition technology.
The benchmark prescriptions are collectively known as "CTS-2010 standard". IBA (Indian Banks Association) and NPCI (National Payments Corporation of India) are co-ordinating with the banks on implementation of the new standard.
Accordingly, the cheques issued are tested and certified by NPCI and only after such cerification the cheques would be issued to the customers.
All banks providing cheque facility to their customers, have been advised to issue only 'CTS-2010' standard cheques not later than April 1, 2012 on priority basis in northern and southern region which will be part of the northern and southern CTS grids respectively and across the country by September 30, 2 012 through a time bound action plan.
What is the prescription relating to alterations or corrections on cheque forms ?
The prescription on prohibiting alterations / or corrections on cheques has been introduced to curtail cheque frauds on account of alterations in the various fields of cheques & to give protection to customers as well as banks.
No changes / or corrections can be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) or / legal amount (amount in words), fresh cheque leaves should be used by bank customers.
This would help banks in identifying and controlling fraudulent alterations. This prohibition is applicable to cheques cleared under the image based Cheque Truncation System (CTS) only and is effective from December 1, 2010. It is not applicable to cheques cleared under other clearing arrangements for the present.
Src: RBI
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