Are you Ready for the New Cheque Regime?
If you have been wondering why your bank has been repeatedly sending you text messages and emails to change your old cheque book, even though you have plenty of leaves left, here’s the answer:
From January 1, India will move to a faster, more efficient and secure payment settlement system in which banks will only honour cheques embedded with new features.
Under the new Cheque Truncation System (CTS) (see graphic), cheques will be cleared in a day — against three days taken on an average at present.
The system has had a successful pilot run in a few pockets after the Reserve Bank of India (RBI) issued the roadmap for migrating to the new structure in a circular issued last December.
The CTS will do away with the need for physical movement of cheques from a bank branch to a clearing house before the amount is credited to the customer’s account. Instead, entrenched with standardised features such as watermarks and a pantograph, cheques will be cleared electronically through an encrypted and highly secure online gateway.
Besides cutting down on time, the new system will also eliminate clearing-related frauds and help slash banks’ manpower and administrative costs.
Hindustan Times, New Delhi, 03-12-2012