Effective Implementation of Cheque Truncation System in Idbi Bank, New Delhi
1. INTRODUCTION
We all live in a world where we want eveyrthing instant be it Instant coffee, instant entertainment, instant information. Time is the single biggest factor in this “instant” world we live in. So how could banking stay unaffected? After anytime money and Internet banking, we now have instant cheque clearance.
Image based cheque clearing system or Cheque Truncation System (CTS) is a project undertaken by Central banks of many countries such as India (Reserve Bank of India – RBI), UAE (Central bank), Saudi Arabia (Saudi Arabia Monitoring Agency – SAMA) etc. for faster clearing of cheques. CTS promises to bring multiple benefits to customers by substantially reducing the time taken to clear the cheques as well as to the banks by enabling them to offer better customer services and increasing operational efficiency by cutting down on overheads in physical clearing. In addition, CTS also offers better reconciliation and fraud prevention. CTS uses cheque image, instead of the physical cheque itself, for clearing of the cheque.
Image-based clearing systems have great potential in India as implementing them can result in huge cost savings for banks. The expenses incurred in archiving, storing, and transporting documents can be drastically reduced. It has been estimated that the cost savings for a mid-sized public sector bank to be in the range of Rs 20-25 crores per year. The benefits of electronic cheque presentment will be seen both in the back-office and at the customer interface. It will streamline cheque handling and speed up the clearing process to give customers faster access to their money. While the actual cost of the solution depends upon the number of branches that decide to adopt this technology, the minimum cost for a bank is in the range of Rs 2.5 crore.
1.1 OBJECTIVE OF THE STUDY 1. To find out the need for Cheque Truncation System in Indian Banks.
2. To study the problems associated with manual
We all live in a world where we want eveyrthing instant be it Instant coffee, instant entertainment, instant information. Time is the single biggest factor in this “instant” world we live in. So how could banking stay unaffected? After anytime money and Internet banking, we now have instant cheque clearance.
Image based cheque clearing system or Cheque Truncation System (CTS) is a project undertaken by Central banks of many countries such as India (Reserve Bank of India – RBI), UAE (Central bank), Saudi Arabia (Saudi Arabia Monitoring Agency – SAMA) etc. for faster clearing of cheques. CTS promises to bring multiple benefits to customers by substantially reducing the time taken to clear the cheques as well as to the banks by enabling them to offer better customer services and increasing operational efficiency by cutting down on overheads in physical clearing. In addition, CTS also offers better reconciliation and fraud prevention. CTS uses cheque image, instead of the physical cheque itself, for clearing of the cheque.
Image-based clearing systems have great potential in India as implementing them can result in huge cost savings for banks. The expenses incurred in archiving, storing, and transporting documents can be drastically reduced. It has been estimated that the cost savings for a mid-sized public sector bank to be in the range of Rs 20-25 crores per year. The benefits of electronic cheque presentment will be seen both in the back-office and at the customer interface. It will streamline cheque handling and speed up the clearing process to give customers faster access to their money. While the actual cost of the solution depends upon the number of branches that decide to adopt this technology, the minimum cost for a bank is in the range of Rs 2.5 crore.
1.1 OBJECTIVE OF THE STUDY 1. To find out the need for Cheque Truncation System in Indian Banks.
2. To study the problems associated with manual