Banks across the country are in the process of issuing new-look cheques with more security and standardised features to all its customers by December 31, 2012.

From January 1, 2013, cheques which do not conform to CTS-2010 standards would not be entertained by banks.

‘Cheque Truncation System (CTS)-2010 standard’ is a set of benchmarks towards achieving standardisation of cheques issued by banks across the country. These include provision of mandatory minimum security features on cheque forms such as quality of paper, watermark, bank’s logo in invisible ink, void pantograph and standardisation of field placements on cheques. The benchmark prescriptions known as ‘CTS-2010 standard’ are to be implemented by December 31, 2012.

The Reserve Bank of India (RBI) had issued a directive in this regard first on December 27, 2011, advising all banks to provide cheque facility to their customers in compliance with CTS-2010 standard in a time-bound manner not later than September 30, 2012. Adherence to CTS-2010 Standards has inherent advantages as the security features in cheque forms help the presenting banks to identify the genuineness of the drawee banks’ instruments while handling them in the image-based scenario. “The homogeneity in security features act as deterrent against frauds, and the fixed field placement specifications facilitate straight-through-processing at drawee banks’ end through the use of optical/image character recognition technology,” the RBI said in a notification.

The RBI had issued a plan to ensure a time-bound migration to CTS-2010 standard cheque formats by all banks. As per the plan, banks had to arrange to issue only multi-city/payable at par CTS-2010 standard cheques not later than September 30, 2012, and also to make arrangements to withdraw the non-CTS-2010 standard cheques in circulation before December 31, 2012, by creating awareness among customers.

Further, banks holding post-dated EMI cheques — received either on their own behalf or on behalf of their NBFC clients — were also instructed to replace non-CTS-2010 standard cheques with CTS-2010 standard cheques before December 31, 2012.

The RBI also asked non-banking finance companies (NBFCs) accepting post-dated cheques from their customers for future EMI payments to ensure replacement of non-CTS-2010 standard compliant cheques with CTS-2010 standard compliant cheques before December 31, 2012.

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