What is the Full Form of CTS?

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Full form of cts

The full form of CTS is Cheque Truncation System. It is a Reserve Bank of India project that was created to expedite the clearance of cheques. It does not entail physically transferring cheques from one bank to another. It is essentially an online image-based cheque-clearing system that uses the picture of the cheque to clear the cheque. The drawer bank sends an electronic image of the check together with the MICR number to the drawee bank.

History of CTS

  • In February 2008, the Reserve Bank of India launched the CTS for the first time in the National Capital Region of New Delhi, with ten trial banks. The deadline for all banks was set for the end of April 2008.
  • It began on September 24, 2011, in Chennai.
  • In 2013, the Reserve Bank of India (RBI) issued orders that beginning August 1st, 2013, only CTS-2010 checks will be accepted for clearing. The expiration date was later extended to December 31, 2013, in July 2013.

Traditional MICR-based check processing was discontinued in the NCR (National Capital Region) and Chennai following the switch from MICR to CTS.

Benefits of CTS

  • Cheque transactions are completed more quickly, saving time and money.
  • Transactional errors are less likely.
  • Checks are being cleared faster than in the past.
  • There have been no reports of misplaced checks.
  • Transactions between states are conceivable.
  • decreased the likelihood of cheque fraud
  • It has relieved the banks of their strain.
  • It reduces the time and effort required for manual cheque moving.
  • It improves the banking system’s operational efficiency.
  • Unlike traditional methods, CTS allows customers to receive payments fast and cheaply.
  • There are no outstation cheque collection charges if the collecting and paying banks are located within the jurisdiction of a comparable CTS grid, even if they are in separate cities.

Limitations of CTS

Although check truncation technology is useful for transmitting checks, not all countries have invested in it. This is because many locations are emphasising the gradual phase-out of checks as a form of payment in favour of various types of electronic payment systems. Despite the fact that cheque truncation slows processing and decreases costs, the first buyer must still use paper checks. Although touching paper is less essential with digital images, this technique is still largely outmoded when compared to entirely electronic payments.

Also Read: Full form of USB

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