Full Form of CTS: Entire process, Benefits ,Advantages, History

 The Check Withdrawal System (CTS) is a check settlement system operated by the Reserve Bank of India (RBI) for the faster processing of checks. As the word suggests, withdrawing money is one way of stopping the flow of a physical check in the clearing method. Instead, an electronic copy of the check is sent with the essential information. The check control system refines the entire check processing and accounting process and offers many advantages such as time and cost savings, economic efficiency including personnel rationalization, redesign of business processes and improved customer service.

 CTS stands for Cheque Truncation System . Reserve Bank of India (RBI) launched CTS All India in September 2020 to make check repayments safer and faster. The introduction of all check payment systems (CTS) in all branches across the country has recently become mandatory for all banks by September 30, 2021. CTS will be a big step towards digital India. IMPS, RTGS and NEFT were the game changers in the banking sector. Checks are still one of the leading payment methods in India and a faster check processing cycle through CTS is sure to result in a better customer experience.

 In addition, the process for banks will be more efficient, cheaper and more secure. Nelitos CTS has been successfully implemented in public, private and cooperative public banks in India. By implementing a network-based check truncation system, the entire filtering process achieves speed and operational efficiency, as well as other benefits such as business process redesign, cost efficiency, better service and the use of advanced technology. Nelito’s team is currently implementing the solution in Myanmar. Our product complies with the instructions of the Myanmar National Payment and Settlement System and works with a mechanical settlement system called the Mechanical Settlement System (MCH) of the Central Bank of Myanmar (CBM).

Brief History of CTS “Cheque Truncation System”

  • The CTS was first sent in February 2008 by the Reserve Bank of India in the National Capital Region of New Delhi.
  • In September 2011 he was sent to Chennai.
  • In 2013, the Reserve Bank of India (RBI) only selected CTS-2010 checks from August 1, 2013 to be recognized by banks for a limited time. In July 2013, this deadline was met by December 31, 2013.

The entire process of CTS?

1. In the cts procedure, the respective bank branch you are connected to registers your photo and all other details of the check through the bank entry process. CTS is an internal banking business. The bank is required to take a photo of the check with certain details for billing purposes
2. A term called public key infrastructure is implemented in cts. Data integrity ensures security and non-denial. Depending on the process, the liquidity bank then sends a signed and encrypted copy of the check to the central processing point, which forwards the check to the target bank or the payer.
3. Payment banks are equipped with a system called the Settlement Interface, which helps to securely transfer data and images to clearings. It then processes the data clearing, reports the account number and sends the images and data to the paying banks.
 4. CHI issues the return of unpaid instruments to the paying banks. The returned files are then returned and go through the same process and are released by the agencies during the undo session.
5. A clearing cycle is only considered completed when the settlement session has been successfully completed. The entire performance of the CTS system is based on the core of the images and data recorded on the Internet.

 What are Benefits to Account Holders

Since there is no real check movement, you don’t have to worry about the check getting lost in transit. Using CTS checks also means faster processing, a shorter processing cycle and a faster deposit into your account. Depending on whether it is a domestic or international check, the check can be paid on the same day or within 24 hours.
The biggest benefit is that CTS-compliant checks are more secure than older checks and therefore not prone to fraud. When the system is mature, it is also recommended to merge multiple locations and reduce geographic restrictions on check buybacks. For example, it is now possible to process checks in several cities on the same day.

Advantages of CTS?

  • The physical process of transferring checks from banks for settlement takes a lot of time and money. Cancels your CTS. 
  • The risk of losing or stealing checks in transit is now eliminated.
  •  The process used by CTS is very secure.
  •  The time it takes to cash a check is significantly reduced. There are no geographic location restrictions in online mode.

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