Short Note – CTS-2010 STANDARD

Hello and welcome to ExamPundit. Today we have prepared a Short Note on CTS-2010 STANDARD. It is very important for Banking PO and Clerical Exams and Interviews.

• Truncation is the process in which an issued cheque is not
  moved physically from the drawer bank branch to the drawee bank branch. Instead
  an electronic image of the cheque is sent to the drawee branch through the
  clearing house along with relevant information like data on the MICR band, date
  of presentation, presenting bank, etc.
• Cheque truncation thus eliminates the requirement of physically moving
  documents across bank branches except unavoidable circumstances. This
  effectively eliminates the associated cost of movement of the physical cheques,
  reduces the time required for their collection and brings elegance to the
  entire activity of cheque processing.
• RBI decided to prescribe certain benchmarks towards
  achieving standardisation of cheques known as “CTS-2010 standard”,
  specifications.

• RBI has mandated NPCI to operationalise CTS. NPCI will act
  as a Cheque Processing Centre (CPC) and will process electronic cheques and
  images received from member banks

• Paper: Paper
  should have protection against alterations by having chemical sensitivity to
  acids, alkalis, bleaches and solvents giving a visible result after a
  fraudulent attack. CTS-2010 Standard paper should not glow under Ultra-Violet
  (UV) light i.e., it should be UV dull.
• Watermark: All
  cheques shall carry a standardized watermark, with the words “CTS-INDIA”. It
  should be oval in shape and diameter could be 2.6 to 3.0 cms. Each cheque must
  hold atleast one full watermark.
• VOID pantograph:
  Pantograph with hidden / embedded “COPY” or “VOID” feature shall be included in
  the cheques. This feature should be clearly visible in photocopies and scanned
  colour images as a deterrent against colour photocopy or scanned colour images
  of a cheque.
• Bank’s logo:
  Member Bank’s logo shall be printed in ultraviolet (UV) ink. The logo will be
  captured by / visible in UV-enabled scanners / lamps. It will establish
  genuineness of a cheque.
• Mandating colours and
  background: Light / Pastel colours so that Print / Dynamic Contrast Ratio
  (PCR / DCR) is more than 60% for ensuring better quality and content of images.
• Prohibiting alterations
  / corrections on cheques: No changes / corrections should be carried out on
  the CTS cheques (other than for date validation purposes, if required). For any
  change in the payee’s name, courtesy amount or legal amount etc., fresh cheque
  forms should be used by customers. This requirement is for cheques issued under
  CTS only and no other cheques.
• Printing of account field:
  Cheques used in current accounts and corporate customers, should be issued with
  the account number field pre-printed. Courtesy amount means amount in figures
  and legal amount means in words.

• Speeds up the process of collection of cheques resulting in
  better service to customers
• Reduces the scope for clearing-related frauds or loss of
  instruments in transit
• Lowers the cost of collection of cheques
• Removes reconciliation-related and logistics-related
  problems
• The homogeneity in security features also act as a deterrent
  against cheque frauds.

• Speed Clearing is an arrangement to clear intercity non-at
  par items.
• Grid Clearing is an arrangement that allows banks to present/receive
  cheques from/to multiple cities in a Single Clearing House through a service
  branch at one city.

• It reduces the time taken to clear the cheques as well gives
  banks to offer better customer services and increases operational efficiency by
  decreasing on overheads involved in the physical cheque clearing process which
  was used earlier.
• It also provides better reconciliation and fraud prevention.

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