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Saturday, Dec 14, 2019

Cheque truncation system

Truncation is the process of stopping the flow of the physical cheque in branch and presenting an electronic image of the cheque.

business Updated: May 21, 2019 11:08 IST
HT Correspondent
HT Correspondent
Hindustan Times, Gurgaon
Clearance of non-CTS cheques takes a longer time.
Clearance of non-CTS cheques takes a longer time.(Arijit Sen/HT File Photo)
         

WHAT IS IT?

Truncation is the process of stopping the flow of the physical cheque in branch and presenting an electronic image of the cheque through the clearing house along with details such as data on the MICR band, date of presentation and presenting bank. Cheque Truncation System (CTS) eliminates the associated cost of movement of the physical cheques and reduces the time of collection.

NON-CTS CHEQUE CAN WORK TOO

Though banks replaced all cheques to CTS, there are customers who still present non-cts cheques. However, clearance of non-cts cheques takes a longer time. The delay can range from 15 days to two months. Before taking a cheque make sure it is CTS enabled to avoid delays.