What is the difference between Cheque Truncation and an Electronic Cheque?

Cheque truncation and electric cheques are two different things. In cheque truncation the physical movement of a paper cheque issued stops and electronic flow begins while the electronic cheque is issued electronically and no paper is involved.
In cheque truncation, at some point in the flow of the cheque, the physical cheque is replaced with an electronic image of the cheque and that image moves further. The processing is done on the basis of this truncated cheque and physical cheque is stored. MICR data is very useful in check truncation.
The electronic cheques are issued in electronic form with digital signatures / biometric signatures / encrypted data.
The negotiable Instruments (Amendment) Act of 2002 gives constitutional validity to the electronic cheques.

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