Just a day to clear a cheque. This could soon become a reality in Mumbai.MUMBAI: Faster clearance is possible by using an e-cheque, which is an image of the real one. As a result, cheques will not have to be physically moved from the collection centre to the clearance centre, reducing both time and cost.
It’s called the cheque truncation system (CTS) and is favoured around the globe. For the last five years, the Reserve Bank of India has been working on implementing CTS to replace the current magnetic ink character recognition (MICR) technology, which requires physical movement of cheques.
Using CTS, if a cheque is deposited at a bank branch today, it will be cleared the next afternoon, instead of the three days it takes now.
The system was on a one-month pilot run in the National Capital Region and recently went live there. A total of 72 branches of State Bank of India, Bank of India, Punjab National Bank, Syndicate Bank, ICICI Bank, Standard Chartered Bank, Bank of America, and Karur Vysya Bank in Delhi have adopted the system.
Now the RBI planning to implement it in Mumbai and Chennai.
Maninder Singh Juneja, senior general manager at ICICI Bank, said, “If it is across the country it will be a highly beneficial move. Sometimes, cheques may take 2-3 weeks to clear, when they have to be physically moved from small locations away from the clearing zones. After the system goes live the clearance of cheques would be faster and will scale up.”
Banks would, however, have to create a huge digital database to preserve these cheques, for up to eight years.
But, it might still be some time before we see a scale-up in cheque clearance. Inspite of being on a pilot run for quite some time now, the system has not been churning volumes, say experts from Delhi.
