Is your cheque book CTS-2010 compliant?
We are in the month of December already, and we are quite sure that many of you would be jotting down your "to-do list" for the next calendar year. But here's something that requires your immediate attention, for you to handle your financial transactions comfortably, before you exude hope for prosperity in the New Year.
Beginning next year, i.e. from January 1, 2013 Cheque Truncation System (CTS) would be implemented, whereby flow of the physical movement of cheque (issued by a drawer to the drawee branch), will be eliminated in the truncation process. Instead an electronic image of the cheque will be sent along with the relevant key information. Thus going forward from January 1, 2013 you may not be able to use your old cheque leaves, if they aren't CTS complied.
So, if you have sent a request for issuing a new cheque book, say a couple of months back or more, and have enough cheque leaves even at present, you must check whether they are CTS complaint before you issue a cheque intended to be honoured anytime in 2013.
As per the guidelines the new cheques need to have:
In case if your cheque book does not reflect the aforementioned details you must obtain a new CTS complied cheque book at the earliest, and surrender the non-compliant one to the bank. If you have availed a home loan and / or auto loan and issued post-dated cheques instead of opting for direct debit, then you will be required to replace such post-dated cheques with the CTS-2010 compliant ones before December 31, 2012. To avoid this hassle you could easily switch to the direct debit / ECS mode where the Equated Monthly Installment (EMI) amount would be debited from your account every month.
- Cheque printer details along with CTS-2010 mentioned (on the extreme left hand side, near the side where you detach a cheque leaf from the cheque book);
- Bank's logo and details (on the left hand side corner);
- VOID pantograph (just below where the account number is mentioned);
- Rupee symbol "" (where the amount in figures needs to be written); and
- Signature space indicator mentioning "please sign above"
Moreover, it is noteworthy that one needs to be careful while writing new cheques, since those with alternations in crucial fields such as payee's name and amount in figures or words will not be processed under the new system. A new cheque will have to be issued, if such alterations are sighted.
We are of the view that, cheque truncations could speedup up the clearing process and thereby provide better service to customers and reduce the scope of clearing related frauds and also marginalise cost related to collection of cheques. So, one would experience a more efficient, secure and a quicker clearing process under CTS.
PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.
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