Q. What is 'Cheque Truncation System (CTS)', recently seen in news?
Answer:
The process of stopping the physical movement of a cheque and using its electronic image instead
Notes: The RBI recently introduced Continuous Clearing of Cheques under the Cheque Truncation System (CTS) for faster cheque clearance. CTS is an online system that captures and transmits cheque images and Magnetic Ink Character Recognition (MICR) data electronically, eliminating the need for physical cheque movement. CTS uses a PKI-based security system with dual access control, user ID, passwords, cryptobox, and smart card interfaces. Only CTS-2010 compliant cheques, with standard security features like watermarks and invisible ink logos, are accepted for clearing. Standardization helps banks in processing and recognizing cheques efficiently.