The Reserve Financial institution on Monday requested banks to implement the image-based Cheque Truncation System (CTS) in all branches by September 30, a transfer geared toward sooner settlement of cheques leading to higher customer support. There are about 18,000 financial institution branches which might be nonetheless outdoors any formal clearing association.
Final month, the Reserve Financial institution of India (RBI) had introduced pan-India protection of CTS by bringing all financial institution branches underneath the image-based clearing mechanism.
The CTS is in use since 2010 and presently covers round 1,50,000 branches. All of the erstwhile 1,219 non-CTS clearing homes (ECCS centres) have been migrated to CTS efficient September 2020.
It’s, nevertheless, seen that there are branches of banks which might be outdoors any formal clearing association and their clients face hardships because of longer time taken and price concerned in assortment of cheques offered by them, the RBI mentioned.
“To leverage the provision of CTS and supply uniform buyer expertise regardless of location of her/his financial institution department, it has been determined to increase CTS throughout all financial institution branches within the nation,” it mentioned in a round.
To facilitate this, banks must be certain that all their branches take part in image-based CTS underneath respective grids by September 30, 2021, it mentioned.
Banks are free to undertake a mannequin of their alternative, like deploying appropriate infrastructure in each department or following a hub and spoke mannequin, and anxious banks ought to coordinate with the respective Regional Places of work of RBI to operationalise this, it mentioned.
Banks have additionally been requested to tell the RBI the roadmap to realize pan-India protection of CTS and submit a standing report earlier than April 30, 2021.
The RBI had proposed to carry all such branches underneath the CTS clearing mechanism by September 2021 so as to carry operational effectivity in paper-based clearing and make the method of assortment and settlement of cheques sooner leading to higher customer support.