Non-CTS Cheques Valid Until July
The Reserve Bank of India has asked banks to stop collecting fresh post-dated cheques or equated monthly installment cheques in any centre where electronic clearing (ECS) facility is available.The directions are part of the central banks latest directive on cheque truncation which extend the validity of cheques issued in the old format until July 31,2013. Cheque truncation system (CTS) refers to RBIs plan to discontinue routing paper cheques all the way from the drawees bank branch to the issuers branch.
The objective is to replace the time consuming and expensive cheque clearing system with a partly electronic system where cheque images are electronically captured and routed to the issuing bank for clearing.This requires the cheques to be of a standardized design which is prescribed by RBI as CTS-2010 format.
RBI had originally set March 31 as the deadline until which cheques issued in the old format would be valid.
Times of India, New Delhi, 19-03-2013