CTS: The Reserve Bank of India (RBI) today said that the Cheque 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 Cheque 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 theCheque truncation system.” Under this process, the Cheque issuer presents electronic details related to the Cheque 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 Cheque based transactions. This new rule came into force from January 1, 2021. This system will be applicable to the payment through the Cheque 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 Cheque truncation system?
Cheque truncation is a process of clearing system checks. In this, the physical Cheque 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 Cheque truncation system makes the process of Cheque collection faster. Under CTS, instead of sending the Cheque from one bank to the other bank, the Cheque is sent electronically. Due to the absence of the Cheque from one place to the physical form, the cost is reduced and the time taken in the Cheque collection is also reduced.
Apart from sending the electronic image of the Cheque, apart from it, if the Cheque is sent physically from one place to another, there is a risk of loss or damage. But there is no such problem in CTS.
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