If you have been wondering why your bank has been repeatedly sending you text messages and emails to change your old cheque book, even tho...
If you have been wondering why your bank has been repeatedly sending you text messages and emails to change your old cheque book, even though you have plenty of leaves left, here’s the answer:
From January 1, India will move to a faster, more efficient and secure payment settlement system in which banks will only honour cheques embedded with new features.(read about New Cheque system)
Under the new Cheque Truncation System ( CTS) ( see graphic), cheques will be cleared in a day — against three days taken on an average at present.
The system has had a successful pilot run in a few pockets after the Reserve Bank of India ( RBI) issued the roadmap for migrating to the new structure in a circular issued last December.
The CTS will do away with the need for physical movement of cheques from a bank branch to a clearing house before the amount is credited to the customer’s account. Instead, entrenched with standardised features such as watermarks and a pantograph, cheques will be cleared electronically through an encrypted and highly secure online gateway.
Besides cutting down on time, the new system will also eliminate clearing- related frauds and help slash banks’ manpower and administrative costs by eliminating some steps.
Prohibiting alterations / corrections on cheques : No changes / corrections should be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) or legal amount (amount in words), etc., fresh cheque forms should be used by customers. This would help banks to identify and control fraudulent alterations.This rule will applicable on branches in which CTS clearing system will start wef 01.01.2013 (update date has been extended to 01.04.2013)