Come Jan 1, existing bank cheques to become trash
Standard uniform CTS-2010 will take over
Srinagar, Nov 14: Using cheques to do transaction with your bank? Come January your cheque books would become a useless piece of paper: Reason, the existing non-uniform standard of cheques would be taken over by standard uniform Cheque Truncation System (CTS-2010).
As per the direction of the RBI all the banks operating in India including in J&K have been asked to disband the existing cheques and adopt the CTS-2010.
The non-CTS-2010 cheques would be phased out by December 31, 2012 and the new standard cheques would come into operation from January 1, 2013.
The shift to the new standard, according to sources, would help reduce clearing-related frauds, remove logistics-related problems and curtail the physical movement of cheques.
Officials said the CTS-2010 has already been introduced in some states in India. “Now, the RBI has directed banks in other states including J&K to adopt the new standard to ensure more transparency, reliability and easy access to the customers,” a banker told Greater Kashmir.
He said after shifting to new standard, the traditional MICR-based cheque processing will be discontinued.
“All the existing cheque books will be cancelled and the new ones will be issued, but they will be different from the earlier ones,” he said.
“The new standard will speed up the process of cheque collection resulting in better service to customers. It will reduce the scope for clearing-related frauds or loss of instruments in transit, besides lowering the cost of collection and removing logistics-related problems.”
“The decision of introducing CTS-2010 is not to abandon the existence of cheques completely. The new standard will focus on improving the efficiency of the cheque clearing cycle.”
About the benefits of the new standard, many bankers and experts told Greater Kashmir that CTS was a much secure system as compared to exchange of physical instrument.”
New cheques under CTS-2010, they said, would contain quality paper and will have watermark and a logo of the bank concerned.
“The new cheque regime will provide customers a great ease. If a customer wants to transfer a cheque for withdrawal to the next bank, the CTS-2010 would ensure the online exchange.”
Interestingly, the new standard will offer several benefits to banks as well. “It would bring about human resource rationalization, cost effectiveness, business process re-engineering, better service and adoption of latest technology,” experts said.
Truncation of cheques has been made legal by virtue of amendments in sections 6 and 1(4) to the Negotiable Instruments Act, 1881, besides by introduction of section 81 A.
Head, Corporate Communication Department and Editor, J&K Bank Sajjad Bazaz said introduction of uniform CTS-2010 has various advantages. “The new system would help banks to identify the genuineness of the drawee banks’ instruments. The use of optical/image character recognition technology feature in the CTS-2010 system will act as a deterrent to curtail frauds,” he said.
“The electronic movement of images of cheques speeds up the process of settlement and can facilitate reduction in the clearing cycles as well. Moreover, there is no fear of loss of instruments in transit,” Bazaz said, adding, “J&K Bank has launched a multi-channel media campaign to create awareness among its customers about the timeline of non-CTS-2010 cheque expiring on December 31, 2012.”
Lastupdate on : Wed, 14 Nov 2012 21:30:00 Makkah time
Lastupdate on : Wed, 14 Nov 2012 18:30:00 GMT
Lastupdate on : Thu, 15 Nov 2012 00:00:00 IST
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