The Reserve Bank of India has asked banks to stop collecting fresh post-dated cheques or equated monthly installment cheques in any centre where electronic clearing (ECS) facility is available.
The directions are part of the central bank’s latest directive on cheque truncation which extend the validity of cheques issued in the old format until July 31, 2013.
Cheque truncation system (CTS) refers to RBI’s plan to discontinue routing paper cheques all the way from the drawee’s bank branch to the issuers branch.
The objective is to replace the time consuming and expensive Cheque truncation systemclearing system with a partly electronic system where cheque images are electronically captured and routed to the issuing bank for clearing.
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