May 12, 2018

What is Cheque Truncation System (CTS)?




The revolution in Information and Technology and Computer Science in past three decades has benefited Banking and Finance sector in achieving highest milestones in serving their Customers. 
Even though you do shopping with the help of plastic cards, still for large sum of money a cheque is being used today. Now that piece of paper also received a computerization called as Cheque Truncation system or CTS. 

What is CTS?
Cheque Truncation System (CTS) is a policy that is implemented by the Reserve Bank of India (RBI) in year 2008. This came into action in April 2013. The advancement in technology will help you gain the efficiency you expect on a cheque transactions.
Magnetic Ink Character Recognition (MICR) is a legendary technology that plays the heart of this technology. Each and every cheque paper contains a magnetic code that can only be read by a MICR reader. So the collecting bank transfers these code to the bank having your account to verify credentials.

How does this benefits you?
Obviously, it does a lot. If you got a cheque for a large sum usually the cheque physically needed to be carried to the paying bank for verification, but now instead they send the information’s like MICR field, date of presentation, payee information etc via internet to make the transaction easy and efficient.
  • Time efficiency , so you will get your credit money the next day. 
  • Faster transaction time. 
  • Fraudulent free because as the physical cheque doesn’t leave the bank.
How does CTS helps the Bank?

Way better than before. Now banks can provide you better service because a lot of time and money is being saved with the implementation of this process. Moreover efficient reconciliation provide the bank a faster transaction processing than before, saving banks time, money and energy.
A better banking service through Technology (CTS) means faster movement of money in Business world and better growth prospects. 

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