## Policy Summary: Extension of Cheque Truncation System (CTS) Across All Bank Branches in India
**Objective:** To extend the Cheque Truncation System (CTS) across all bank branches in India, ensuring uniform customer experience irrespective of branch location.
**Background:** The Reserve Bank of India (RBI) announced pan-India coverage of CTS on February 5, 2021. CTS has been in use since 2010, covering approximately 150,000 branches, and all former non-CTS clearing houses (ECCS centres) were migrated to CTS by September 2020. This extension aims to address the hardships faced by customers of branches outside formal clearing arrangements due to longer cheque collection times and associated costs.
**Key Directive:** Banks are directed to ensure all their branches participate in image-based CTS under respective grids by **September 30, 2021**. Banks can adopt a model of their choice, such as deploying infrastructure in every branch or using a hub-and-spoke model.
**Implementation:** Banks are required to coordinate with the respective Regional Offices of RBI to operationalize the CTS extension.
**Reporting Requirement:** Banks must submit a roadmap to achieve pan-India CTS coverage and a status report to RBI by **April 30, 2021**.
**Regulatory Basis:** This directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
**Contact Information:** For inquiries, contact the Department of Payment and Settlement Systems, Central Office, RBI at helpdpssrbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking system.
Cheque Truncation System (CTS): A cheque clearing system based on image technology, designed to speed up the clearing of cheques.
Scheduled Commercial Banks: Banks in India that are listed in the Second Schedule of the Reserve Bank of India Act, 1934.
Regional Rural Banks: Regional Rural Banks in India.
Urban Cooperative Banks: Urban Cooperative Banks in India.
State Cooperative Banks: State Cooperative Banks in India.
District Central Cooperative Banks: District Central Cooperative Banks in India.
Mumbai, Maharashtra: A city in Maharashtra, where the central office of the Reserve Bank of India is located.
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2020-21/107
DPSS.CO.RPPD.No.SUO 21102/04.07.005/2020-21 March 15, 2021
The Chairman and Managing Director / Chief Executive Officer
All Scheduled Commercial Banks including Regional Rural Banks /
Urban Co-operative Banks / State Co-operative Banks /
District Central Co-operative Banks / Local Area Banks / Payment Banks /
Small Finance Banks / National Payments Corporation of India
Madam / Dear Sir,
Extension of Cheque Truncation System (CTS) across all bank branches in the
country
Please refer to the Statement on Developmental and Regulatory Policies dated
February 5, 2021 wherein Reserve Bank of India (RBI) had announced pan-India
coverage of CTS by bringing all branches of banks in the country under image-based
CTS clearing mechanism.
2. The CTS is in use since 2010 and presently covers around 1,50,000 branches.
All the erstwhile 1219 non-CTS clearing houses (ECCS centres) have been migrated
to CTS effective September 2020. It is, however, seen that there are branches of
banks that are outside any formal clearing arrangement and their customers face
hardships due to longer time taken and cost involved in collection of cheques
presented by them.
3. To leverage the availability of CTS and provide uniform customer experience
irrespective of location of her/his bank branch, it has been decided to extend CTS
across all bank branches in the country. To facilitate this, banks shall have to ensure
that all their branches participate in image-based CTS under respective grids by
September 30, 2021. They are free to adopt a model of their choice, like deploying
suitable infrastructure in every branch or following a hub & spoke model, etc. and
concerned banks shall coordinate with the respective Regional Offices of RBI to
operationalise this.
भुगतान और िनपटान �णाली िवभाग, क��ीय कायार्लय, 14वी मंिजल, क��ीय कायार्लय भवन,शहीद भगत �संह मागर्, फोट,र् मुम्बई - 400001
फोन Tel: (91-22) 2260 1000; फैक् स Fax: (91-22) 2265 9566; ई मेल-e-mail : cgmdpssco@rbi.org.in
Department of Payment and Settlement Systems, Central Office, 14th Floor, Central Office Building, Shahid Bhagat Singh Road, Fort, Mumbai -
400001
�हदं ी आसान ह,ै इसका �योग बढ़ाइए4. Banks are advised to inform us (helpdpss@rbi.org.in) the roadmap to achieve pan-
India coverage of CTS and submit a status report before April 30, 2021.
5. This directive is issued under Section 10 (2) read with Section 18 of Payment
and Settlement Systems Act, 2007 (Act 51 of 2007).
Yours faithfully
(P Vasudevan)
Chief General Manager
भुगतान और िनपटान �णाली िवभाग, क��ीय कायार्लय, 14वी मंिजल, क��ीय कायार्लय भवन,शहीद भगत �संह मागर्, फोट,र् मुम्बई - 400001
फोन Tel: (91-22) 2260 1000; फैक् स Fax: (91-22) 2265 9566; ई मेल-e-mail : cgmdpssco@rbi.org.in
Department of Payment and Settlement Systems, Central Office, 14th Floor, Central Office Building, Shahid Bhagat Singh Road, Fort, Mumbai -
400001
�हदं ी आसान ह,ै इसका �योग बढ़ाइए