Coming soon! Faster settlement of cheque payments - Better customer service! Check what RBI asked your bank
In a major development, the Reserve Bank of India (RBI) has asked banks to implement the image-based Cheque Truncation System (CTS) in all branches by September 30.
In a major development, the Reserve Bank of India (RBI) has asked banks to implement the image-based Cheque Truncation System (CTS) in all branches by September 30. The move has been aimed at faster settlement of cheques resulting in better customer service.
What is important to note here is that there are about 18,000 bank branches that are still outside any formal clearing arrangement.
Last month, the Reserve Bank of India (RBI) had announced pan-India coverage of CTS by bringing all bank branches under the image-based clearing mechanism.
The RBI had proposed to bring all such branches under the CTS clearing mechanism by September 2021 in order to bring operational efficiency in paper-based clearing and make the process of collection and settlement of cheques faster resulting in better customer service.
Cheque Truncation System (CTS)
The CTS is in use since 2010 and presently covers around 1,50,000 branches.
All the erstwhile 1,219 non-CTS clearing houses (ECCS centres) have been migrated to CTS effective September 2020.
What RBI said?
- "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," the RBI said.
- "To leverage the availability of CTS and provide uniform customer experience irrespective of location of her/his bank branch, it has been decided to extend CTS across all bank branches in the country," RBI said in a circular.
- "To facilitate this, banks will have to ensure that all their branches participate in image-based CTS under respective grids by September 30, 2021," the RBI circular added.
- "Banks are free to adopt a model of their choice, like deploying suitable infrastructure in every branch or following a hub and spoke model, and concerned banks should coordinate with the respective Regional Offices of RBI to operationalise this," it added.
- Banks have also been asked to inform the RBI the roadmap to achieve pan-India coverage of CTS and submit a status report before April 30, 2021.
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