What is cheque truncation system

The Cheque Truncation System (CTS) is an image-based cheque clearing process introduced by the Reserve Bank of India (RBI). It eliminates the physical movement of paper cheques between banks by using electronic images and data for settlement. Key benefits include:

• Faster clearing cycles, often resulting in same-day or next-day credit.
• Enhanced security by reducing risks of loss, tampering, or transit-related fraud.
• Improved operational efficiency and lower collection costs for the banking system.
• Elimination of geographical limitations within specific clearing grids.