Push to replace old-format cheques

In latest move RBI said that non-CTS cheques will be accepted for regular clearing till December 2013

RBI’s efforts to introduce cheques with uniform security features have not yet fructified as a large number of customers are still using old-format cheques. RBI, which in December 2011 said banks should migrate to the cheque truncation system by September 2012, has extended the deadline four times. The new deadline is December 2013. Customers should come to the banks and get their old format cheques replaced, said Shubhalaxmi Panse, CMD, Allahabad Bank.

Cheque truncation obliterates the need for physical movement of cheques to drawee branches. In this, an electronic image of the cheque is sent to the drawee bank for processing, making the clearance of the cheque much faster.

A senior public sector bank official said the number of non-CTS cheques is so large that it’s taking time to withdraw them.

In the July 16 circular, RBI noted banks had started issuing fresh cheques in the CTS-2010 format. The central bank said beginning from January 2014, a separate window for clearing of non-CTS cheques would be introduced at three CTS centres (Mumbai, New Delhi and Chennai). This special window will operate thrice a week till April 2014. Between April and October 2014, it will operate twice a week and from November 2014 onwards, once a week. Therefore, clearing non-CTS cheques will take a longer time from next year, thereby forcing customers to migrate to CTS -2010 complaint cheques.  

“Banks are taking all efforts to replace the old cheques, but ultimately, it’s for customers to come to the banks and get their old format cheques replaced,” said Shubhalaxmi Panse, chairperson and managing director, Allahabad Bank.

If the deadline is not extended, all cheques which aren’t CTS -2010 complaint won’t be cleared and RBI definitely doesn’t want such a situation to arise, so it is extending the deadline, Panse added.

On the efforts which banks are taking to create awareness among customers on the issue, Panse said: “We have displayed in branches, given advertisements in newspapers, informed customers through SMS, letters and emails but unless customers come and get old cheques replaced, banks can’t do much about it.”  Some of the banks also have taken large number of post dated cheques (PDCs) from customers and challenge for them is to replace them, she added.

December 2011: RBI first issues a notification saying banks should comply with cheque truncation system (CTS) deadline by September 2012

September 2012: RBI extends deadline to December 2012

December 2012: The central bank again grants three months’ extension till March 2013

March 2013: Deadline extended till July 2013

July 2013: RBI further extends deadline till December 2013