This New Year, you need not rush to get your non-CTS (cheque truncation system) 2010-compliant cheques replaced. With some non-banking financial companies (NBFCs) requesting for more time for the CTS-2010 standard cheques, the Reserve Bank of India (RBI) has extended the deadline for withdrawal of non-CTS cheques from 31 December 2012 to 31 March 2013.
This move follows a request from NBFCs and other stakeholders to extend the deadline. So now banks need to issue CTS-2010 cheques to their customers by 31 March 2013.
So you can continue using your old cheques for some more time if you haven’t yet replaced them or your bank doesn’t provide the facility yet. However, beyond 31 March 2013, there may be a problem. Though the apex bank has stated that all non-CTS cheques will continue to be accepted even after 31 March 2013, but these cheques will be cleared at less frequent intervals, which means there will be delay in the clearance of these cheques.
CTS-2010 is a benchmark for standardization of cheques issued by banks across the country. The main feature of CTS-2010 cheques is that a cheque can be cleared electronically. A CTS-2010 cheque will not have to go through the process of physical clearance. When a customer deposits a CTS-2010-complied cheque, the bank can simply send the cheque’s image to the drawee bank, whose cheque has been issued; once the drawee bank scrutinizes and recognizes the cheque, it will get cleared. This move will help banks save on transaction cost and time. Mint Money on 22 November explained the key features of CTS-2010 cheques.
Earlier this year, the central bank had advised all banks to arrange to issue only multi-city/payable at par CTS-2010 standard cheques and to withdraw non-CTS-2010 standard cheques in circulation before 31 December 2012. RBI had also asked banks holding post-dated equated monthly instalment cheques to replace non-CTS-2010 standard cheques with CTS-2010 standard cheques. A majority of the banks have been issuing CTS-2010 cheques as of now.