Will Any change in the process for customers in Cheque Truncation System?
No.
There is no change in the clearing process for bank customers in Cheque Truncation System (CTS). Customers continue to use cheques as at present, except to ensure the use of image-friendly coloured inks while writing the cheques.
Of course, such of those customers, who are used to receiving the paid instruments (like government departments) would also receive the cheque images. Cheques with alterations in material fields are not allowed to be processed under the CTS environment.
What are the benefits of Cheque Truncation System - CTS to bank customers?
The benefits are many. With the introduction of imaging & truncation, the physical movement of instruments is stopped. The electronic movement of images of cheques speeds up the process of settlement & can facilitate reduction in the clearing cycles as well.
Moreover, there is no fear of loss of instruments in transit. Further, limitations of the existing clearing system in terms of geography or / jurisdiction can be removed, thus enabling consolidation and integration of multiple clearing locations managed by different banks with varying service levels into a nation-wide standard clearing system with uniform processes & practices.
CTS also benefits issuers of cheques. Use of images obviates the need to handle & move physical cheques at different points. The scope for frauds inherent in paper instruments is, thus, greatly reduced.
The Corporates if needed can be provided with images of cheques by their bankers for internal requirements,if any. As only the images move, the time taken for receipt of paid cheques is reduced which also gives an early opportunity to the issuers of cheques to detect frauds or alterations, if any, in terms of what (and to whom it) was issued and what (by whom it) was realised.
CTS brings elegance to the entire activity of cheque processing & clearing. Cheque frauds can be greatly reduced with introduction of minimum security features prescribed under CTS Standards 2010, such as embedded verifiable features such as bar codes, encrypted codes, logos, watermarks, holograms, etc., for early interception of altered / or forged instruments.
Obviating the need to move the physical cheques is extremely beneficial in terms of cost and time savings.
The benefits from CTS could be summarized as follows –
* Shorter clearing cycle
* Superior verification & reconciliation process
* No geographical restrictions as to jurisdiction
* Operational efficiency for banks and customers alike
* Reduction in operational risk and risks associated with paper clearing
Src: RBI
Core modernization
ReplyDelete"Banks around the world have been buffeted by a combination of forces exerted by customers, competitors, and regulators. In order to thrive and transform into a customer centric digital bank, banks will have to fast-track their digitization efforts.
"