Cheque Truncation System (CTS) Cheque Truncation System: Cheque Truncation System (CTS), in India, is a project of the Reserve Bank of India (RBI), commenced in 2010, for faster clearing of cheques. Infrastructure Required- Point of Truncation: Image Cheque scanner Hardware Software Network WORKING OF CTS:In the earlier system, customer presented the cheque to the bank which sent the cheque to the clearing house, after which money would be credited to your account. It usually takes 3-4 days for the physical transfer of cheques and amount to transfer. CTS clears cheques electronically. Physical transfer of cheques between banks has ended. • Now it on average takes 1 day to clear and transfer the amount. Process of CTS:The cheque is captured by the presenting bank (collecting bank) through a ‘Capture System’ An encrypted format to the ‘Clearing House’, from where it will be sent to the paying bank A clearing House Interface, which is sort of a gateway. Presentation Clearing’, which involves the process of data reading. The payment is processed Benefits of CTS:Benefits to customer: No fear of loss of cheque in transit Faster credit of funds to customer’s account More secure Lesser chances of fraud Multi-city cheques could be cleared on the same day Benefits of CTS:Benefits to Banks: Reduction in cost of transit and errors to manual work Verification will also be faster Shorter clearing cycle Operational efficiency Reduction risks involving paper sharing Thank you