RBI begins cheque truncation system

VARANASI: To improve the efficiency of cheque clearance and reducing clearance-related frauds, the Reserve Bank of India (RBI) has begun a cheque truncation system (CTS) as pilot project.  Deputy Governor, RBI, Shyamala Gopinath gave this information to the media on Friday. Gopinath is here to take part in a programme of RBI under financial literacy project at Raja Talab on Saturday. "Presently the CTS is operational at Delhi and Chennai," she said and added it would be implemented at national-level after it was properly operational. The CTS is an online image-based cheque clearing system where cheque images and magnetic ink character recognition (MICR) data are captured at the collecting bank branch and transmitted electronically eliminating the actual cheque movement. Its benefits include realisation of proceeds of cheque within the same day, easy data storage and retrieval, minimise risks and secured cheque clearing system, cost saving, minimising bottlenecks and delays between presentation and realisation time.   Regarding RBI's financial literacy project, she said the objective of the project was to disseminate information regarding the central bank and general banking concepts to various target groups, including school and college-going children, women, rural and urban poor, defence personnel and senior citizens. "It is intended to educate the masses about the benefits of banking system and cover maximum villages under banking system," she said and added banks officials had also been directed to simplify the procedure to attract maximum number of people.   She said in the current financial year, three villages in Varanasi, Chitrakoot and Allahabad districts of Uttar Pradesh had been selected for the financial literacy project. The beginning is going to be made at a village in Raja Talab area on Saturday. She said all banks had been asked to maintain transparency in their functioning. Replying to a query regarding inflation, she said the matter would be reviewed in a meeting on May 3.