Considered as an important milestone in the history of Indian banking, check truncation tool System (CTS) is The purpose Verify clearance efficiency and the clearance time for revisions reduced to one day, whereby the trimming along the driving significantly. India is preferably treated 1200000000 inspections per year, and therefore the implementation of this system drastically lower waiting involved. The nationwide system will be introduced from 1 January 2013.
How does it work?
An online image-based check clearing system would pick branch out scanned images together with the magnetic ink character (MICR) of the checks will be sent electronically by means of their capture system, which eliminates the need for physical / manual transfer of the controls. The captured Images and data are encrypted and signed and sent to the Clearinghouse or the central processing location and then sent to the person or paying bank.
This helps speed up the audit collection process, which ultimately helps to provide better and faster
customer service.
Key features of Cheque Truncation System
1.User-friendly graphical interface
2.Automatic encoding and approve checks
3.Encryption of data file before transmission to the clearinghouse or service department
4.Uses a unique transaction number follower process to confirm the status of control
5.Improved and efficient settlement and prevention of fraud
6.Equipped with extended archiving procedure, images and data to facilitate report covers generation with the future demand
7.Warnings RMS in case of return of check due to insufficient funds
The effect of CTS Customer
Treatment of EMIS With the introduction of CTS
In cases where customers have trouble following control (PDC) for the payment of monthly installments towards a loan, they would have to give new checks to the bank or service provider under the new directive on CTS by RBI. Replacing these shall be completed within December 31, 2012 and applies to all banks and NBFCs.
Collection of old Checks
If you have an old control you, you have to get it redeemed by 31 December 2012. RBI mandate states that payments for these checks are only valid until then. Banks must comply with the new forms of CTS-compatible checkbooks to give the desired functions for all their customers by 31 December 2012. Customers may need to have their old checkbooks vomiting or cancel them and provide proof of cancellation. No compensation will be charged by the bank for issuing new check books In addition to these aspects, the system does not in any way affect the way things work for a customer. They would continue to use checks as they do at the moment, but the controls are changed or was not allowed under the new scheme.
The other measures to is taken while launching or writing a check is as follows:
1. Make sure all details are clearly and legibly in black or blue ink
2. Write the name of the payee, amount and date and properly sign the check.
3. If you use seals on control to ensure that they are printed in such a way that they do not mask or hide the other important areas of the audit.
Advantages of the building for the customers
There are many advantages truncation system as seen from the customer.
1. Approval cycle is shortened - When this system is implemented, the physical or manual movement of the controls for the approval has ceased. With controls, electronic, settlement process is faster, easier decrease in clearance cycle.
2. The fear of loss of control during the transfer of the acquiring bank to the person or the receiver banking eliminated.
3. Limitations in the current clearance system in relation to competence and geography eradicated. This makes the integration and consolidation of clearing several places different banks offer different service levels in a standard authorization scheme across the country.
4. CTS helps reduce fraud. In addition, electronic transmission is quickly and allow for rapid detection of fraud or a change to the recipient, amount or the issuer of the check. CTS prescribe minimum safety during 'CTS-2010 standards' with superior verification process that facilitates the reduction of fraud.
5. The operational efficiency of both the bank and the customer is improved with introduction of this system.
By BankBazaar.com - an online marketplace for your personal loan and mortgage needs.
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