Srinagar: With Srinagar now covered under the Cheque Truncation System (CTS), over 25 banks with their 200 plus branches spread across the city went live on CTS from July 30. The move by RBI is considered a boost to Srinagar’s digital transformation and progress as an aspiring Smart city.
The project is being implemented by the Jammu Regional Office of the Reserve Bank of India. It is part of RBI’s plan to operationalise a pan-India Cheque Truncation System by September 2020, first communicated in its Monetary Policy statement in February 2020.
Cheque Truncation System is the process of stopping the flow of the physical cheque issued by a drawer at some point by the presenting bank en-route to the paying bank branch. In its place, an electronic image of the cheque is transmitted to the paying branch through the clearing house, along with relevant information like data on the Magnetic Ink Character Recognition (MICR) band etc. It obviates the need to move the physical cheques across bank branches or districts.
At present, only Jammu, Samba and Kathua districts were covered under CTS. This adversely impacted speed of cheque clearing and quality of services to customers as well as the UT government. The present clearing arrangement with physical movement of cheques is also inefficient, less secure and costlier for the banks. Migration to CTS, therefore, will be a win-win proposition for all stakeholders- customers, banks, UT Government, an RBI official said.
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