CTS Clearing

Cheque Truncation System (CTS)


RBI is considering replacement of the existing system of settlement of payment on the basis of physical cheques by a new procedure called “ Cheque Truncation System” (CTS). It 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.  



  • Customer Service
  • Extended cut off time for acceptance of Customer Cheques by banks
  • Easy retrieval of information
  • Reduced timelines for clearing


Operational Benefit

  • MICR amount encoding not required
  • Reconciliation difference eliminated - MICR and Image data travel together
  • No cheques being lost/tampered/pilfered
  • No risk of any manipulation of data and image during transit
  • CTS 2010 standards leading to enhanced security and automation

Commercial Benefit

  • Cost involved in paper movement eliminated
  • Grid implementation allowing better liquidity management for banks


Fraud Prevention Mechanism Provided

  • Manipulation of data and image during transit is prevented by digital signature / encryption.
  • CTS 2010 standards lead to enhanced security (Pl refer to attached NPCI circular for CTS 2010 standard) MICR reject repair flag