CTS: The Reserve Bank of India (RBI) today said that the Check Truncation System will be operational by September 2021 in branches of all banks of the country. The CTS is currently operational in the country’s premier clearinghouses.
There is big news for those using Czech. The Reserve Bank of India (RBI) today said that the Check Truncation System will be operational by September 2021 in branches of all banks of the country. The CTS is currently operational in the country’s premier clearinghouses. While announcing the Monetary Policy Meeting for the first time after Budget 2021, RBI Governor Shaktikanta Das said, “Around 18,000 banks are still not under the check truncation system.” Under this process, the check issuer presents electronic details related to the check presented for clearing.
RBI introduced this system in 2010. CTS is currently operating only in some big cities. In view of this, the CTS system will be implemented in the entire country from September 2020. Explain that the central bank has decided to implement Positive Pay System to increase the security of check based transactions. This new rule came into force from January 1, 2021. This system will be applicable to the payment through the check of 50,000 or more.
RBI maintains repo rate at 4 percent
The RBI did not change the key policy rate in the bi-monthly monetary policy review and kept the repo at 4 per cent. The reverse repo rate was kept at 3.35 percent. Repo is the rate at which the central bank lends one day to commercial banks. The reverse repo rate is the rate at which banks keep their deposits with the central bank.
What is a check truncation system?
Check truncation is a process of clearing system checks. In this, the physical check issued does not have to roam from one place to another. The bank in which this check is presented travels from here to the drawee bank branch. This way it takes time to clear.
Benefits of CTS
The check truncation system makes the process of check collection faster. Under CTS, instead of sending the check from one bank to the other bank, the check is sent electronically. Due to the absence of the check from one place to the physical form, the cost is reduced and the time taken in the check collection is also reduced.
Apart from sending the electronic image of the check, apart from it, if the check is sent physically from one place to another, there is a risk of loss or damage. But there is no such problem in CTS.
