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CTS Full form

Full form of CTS

 "Cheque Truncation System" is the full form of CTS. CTS is a project of the Reserve Bank of India which was launched for the faster clearance of cheques. It does not involve the physical transfer of cheques from one bank to another bank. It is generally an online image-based cheque-clearing system that uses the cheque image to clear the cheque. The electronic image of a cheque along with the MICR number is sent to the drawee bank from the drawer bank.

History of CTS

  • CTS was first launched in the National Capital Region, New Delhi, by the Reserve Bank of India in February 2008.
  •  It was established in Chennai in September 2011,
  • In 2013, RBI decided on 1 August 2013, that the banks would accept only CTS-2010 cheques for clearance. Later on, in July 2013, this deadline was extended to 31 December 2013.

Benefits of CTS

  1. It saves time, money, and effort involved in the physical movement of cheques.
  2. The cheques clear faster, which results in better customer service.
  3. It improves the operational efficiency of the banking system.
  4. It reduces the chances of fraud related to the clearing of cheques.
  5. No fear of losing cheques in transit.
  6. No geographical restrictions.

Advantages of the CTS system to Banks

Banks offer several payment systems like RTGS, NEFT, etc. These payment systems enable us to transfer funds quickly. Checks are a prominent option, so banks have made it a priority to improve check-clearing efficiency. If the CTS system is implemented, banks will have several advantages. IT significantly reduces the bank's operating costs.

A lot of time is lost in the physical transfer of documents. The process is also labor intensive. The CTS system improved the check posting cycle. The system allows us to clear checks within one day. Banks can process multiple checks at once. As the process involves verification at every stage, the scope for administrative error is significantly reduced.

Banks can allocate their resources much better. Banks can improve customer service and processes with more time on their hands. Operational efficiency is the main reason why more and more banks are adopting the CTS system. All inspection data can be accessed remotely. Saving data is also easy. The CTS system offers a secure channel for transferring money.

Since no manual work is required for the task, the error probability is low. Banks can monitor the transaction in real-time, and the possibility of fraud is reduced. The safe system set up by the RBI has been a great boon for the banks.

Conclusion

Since you have understood the two meanings of CTS, you will have no difficulty understanding their usage. If you have any doubts, use the following FAQ, which will help you immensely. If that is not enough, you can certainly resort to the Internet and find answers to all your questions.