Jammu, July 14: In a move that will be a major boost to the Digitization push in UT of J&K, Samba and Kathua districts will now be covered under the Cheque Truncation System (CTS). CTS has become operational in Samba on July 14 while Kathua district will be covered on July 17. At present CTS is operational only in Jammu district of the UT.
The project is being implemented by Jammu Regional Office of the Reserve Bank of India in coordination with all the member banks of clearing houses in the two districts. This project is part of RBI’s plan to implement a pan-India Cheque Truncation System from September 2020, first communicated in its Monetary Policy statement in February 2020.
Cheque Truncation System is the process of stopping the flow of the physical cheque issued by a drawer at some point by the presenting bank en-route to the paying bank branch. In its place, an electronic image of the cheque is transmitted to the paying branch through the clearing house, along with relevant information like data on the Magnetic Ink Character Recognition (MICR) band etc. It obviates the need to move the physical cheques across bank branches or districts.
At present, there are 30 clearing houses in J&K which are not covered under CTS. This adversely impacts speed of cheque clearing and quality of services to customers and the UT government. The present clearing arrangement with physical movement of cheques is also inefficient, less secure and costlier for the banks. Migration to CTS, therefore, will be a win-win proposition for all stakeholders- customers, banks, UT Government.