By April 1, the entire MICR cheque transactions will be replaced by CTS standard cheques
The gradual shift under way into Cheque Truncation System (CTS) in the banking network in Tirupur district is becoming a boon to the industrialists in Tirupur knitwear cluster considering the huge volumes of cheque transactions taking place every day.
The usage of truncated cheque leaves, now being issued by various banks to customers as a replacement to the conventional Magnetic Ink Character Recognition (MICR) cheques, is making it possible for the banks to electronically clear a cheque and also offer security features that prevent frauds by tampering the figures or signature on the leaf.
“By April 1, the entire MICR cheque transactions in 230-odd branches of various banks across the district will get replaced by CTS standard cheques,” Lead Bank sources told The Hindu .
S. Dhananjayan, a senior chartered accountant and industry consultant, pointed out that since the CTS standard cheques enable electronic transfer, the process of realisation of cheques between the banks comes to almost real-time levels as the scanned images of specially designed truncated cheques were sent online for clearing.
“In the MICR format, the money will reach the beneficiary only after many days as cheque has to physically travel from one bank to another for clearance. Besides fear of losing cheques on transit is a thing of past with the introduction of CTS cheques,” he pointed out.
In financially buzzing clusters like Tirupur, the speedier cheque transaction into the accounts also means customers could get more interest, reduce the transaction costs otherwise levied by banks for physical transfer of MICR cheques and improve efficiency in cash flow management, R. Girish, an exporter and spokesperson of Tirupur Exporters and Manufacturers Association, said.
The salient security features embedded in the newly designed truncated cheques is offering safety against any possible manipulations by fraudulent people.
“Photocopying of the cheque or any tampering with signatures and figures on the CTS standard cheque can be easily detected,” banking sources said.