What is truncated cheque

A truncated cheque is a digital image of a physical cheque, created to speed up the clearing process. Instead of the physical paper moving between bank branches, an electronic image is captured by the collecting bank and transmitted to the paying bank through the Cheque Truncation System (CTS). Key features include:

• Eliminates the need for physical movement of paper cheques.
• Reduces the time required for cheque clearing and reconciliation.
• Enhances security by minimizing the risk of loss or tampering during transit.
• Physical cheques are typically retained by the presenting bank after the digital image is processed.