Monthly Archives: December 2012

CTS (Cheque Truncation System) Cheque

Posted in Bank Cheque, Cheque, CTS cheque, NEW cheque system from 1 Jan 2013 by
Cheque Truncation System (CTS) aims to make cheque clearance more efficient and reduce the clearance time of cheques to one day, thereby trimming down the floating time considerably. India processes as many as 1.2 billions cheques annually and therefore, the implementation of this system would drastically cut down the waiting period involved. The system will be implemented nationwide from April 1, 2013.

Sample CTS Cheque
An online image-based cheque clearing system, the collecting bank branch would deploy scanned images along with the magnetic ink character (MICR) of the cheque which will be sent out electronically using their Capture System, removing the need for physical/manual transfer of cheques. The captured images and the data is then signed and encrypted and sent to the Clearing House or the central processing location and thereafter forwarded to the drawee or paying bank.
This helps speed up the cheque collection process that eventually helps provide better and faster customer service.
Key Features of Cheque Truncation System
  • User friendly graphic user interface
  • Automated coding and endorsing of cheques
  • Encryption of data file before transmission to the clearing house or the service branch
  • Employs a unique transaction follower process to confirm the status of cheque
  • Improved and efficient settlement and prevention of fraud
  • Equipped with enhanced archival procedure that stores images and data facilitating report generation along with future enquiry
  • Alerts RMs in case of return of cheque due to insufficient funds
New cheque leaf
Impact of CTS on Customers
Handling of EMIs with the Introduction of CTS
In cases where customers have issues post-dated cheques (PDC) for payment of monthly installments towards an ongoing loan, they would need to issue fresh cheques to the bank or service provider as per the new directive on CTS by the RBI. The replacement of these cheques needs to be done latest by April 1, 2013 and is applicable on all banks and NBFCs.
Encashment of Old Cheques
Customers may need to surrender their old cheque books or cancel them and show proof of cancellation. No replacement fee will be charged by the bank for issuing new cheque books
Apart from these aspects, the system does not, in any way, affect the way things function for a customer. They would continue using cheques as they do currently; however, cheques that have been altered or modified will not be permissible under the new system. The other precautions that need to be taken while issuing or writing a cheque are:
  • Ensure that all details are clear and readable, using black or blue ink
  • Write the name of the payee, amount and the date and sign the cheque correctly.
  • In case you use seals on the cheque, ensure that they are imprinted in a manner that they do not mask or hide the other important fields of the cheque.
Benefits of CTS for Customers
There are many benefits of the cheque truncation system from the perspective of a customer. 
  • Clearance cycle gets shortened – As this system is being implemented, the physical or manual movement of cheques for clearance has ceased. With cheques being transmitted electronically, the settlement process becomes quicker, facilitating reduction in the clearance cycle.
  • The fear of loss of cheques during transfer from the collecting bank to the drawee or payee bank is eliminated.
  • Limitations of the current clearance system with respect to jurisdiction and geography are eradicated. This enables integration and consolidation of several clearing locations across various banks offering different service levels into one standard clearance system applicable throughout the country.
  • CTS helps reduce the scope of fraud significantly. Moreover, the electronic transmission is quick and allows early detection of fraud or any alteration with respect to the payee, amount or the issuer of the cheque. CTS prescribe minimum security features under ‘CTS-2010 standards’ along with superior verification process that further facilitates in the reduction of frauds.
  • The operational efficiency of both the bank as well as the customer is enhanced with the introduction of this system.

CTS (Cheque Truncation System) Cheque

Posted in Bank Cheque, Cheque, CTS cheque, NEW cheque system from 1 Jan 2013 by
Cheque Truncation System (CTS) aims to make cheque clearance more efficient and reduce the clearance time of cheques to one day, thereby trimming down the floating time considerably. India processes as many as 1.2 billions cheques annually and therefore, the implementation of this system would drastically cut down the waiting period involved. The system will be implemented nationwide from April 1, 2013.

Sample CTS Cheque
An online image-based cheque clearing system, the collecting bank branch would deploy scanned images along with the magnetic ink character (MICR) of the cheque which will be sent out electronically using their Capture System, removing the need for physical/manual transfer of cheques. The captured images and the data is then signed and encrypted and sent to the Clearing House or the central processing location and thereafter forwarded to the drawee or paying bank.
This helps speed up the cheque collection process that eventually helps provide better and faster customer service.
Key Features of Cheque Truncation System
  • User friendly graphic user interface
  • Automated coding and endorsing of cheques
  • Encryption of data file before transmission to the clearing house or the service branch
  • Employs a unique transaction follower process to confirm the status of cheque
  • Improved and efficient settlement and prevention of fraud
  • Equipped with enhanced archival procedure that stores images and data facilitating report generation along with future enquiry
  • Alerts RMs in case of return of cheque due to insufficient funds
New cheque leaf
Impact of CTS on Customers
Handling of EMIs with the Introduction of CTS
In cases where customers have issues post-dated cheques (PDC) for payment of monthly installments towards an ongoing loan, they would need to issue fresh cheques to the bank or service provider as per the new directive on CTS by the RBI. The replacement of these cheques needs to be done latest by April 1, 2013 and is applicable on all banks and NBFCs.
Encashment of Old Cheques
Customers may need to surrender their old cheque books or cancel them and show proof of cancellation. No replacement fee will be charged by the bank for issuing new cheque books
Apart from these aspects, the system does not, in any way, affect the way things function for a customer. They would continue using cheques as they do currently; however, cheques that have been altered or modified will not be permissible under the new system. The other precautions that need to be taken while issuing or writing a cheque are:
  • Ensure that all details are clear and readable, using black or blue ink
  • Write the name of the payee, amount and the date and sign the cheque correctly.
  • In case you use seals on the cheque, ensure that they are imprinted in a manner that they do not mask or hide the other important fields of the cheque.
Benefits of CTS for Customers
There are many benefits of the cheque truncation system from the perspective of a customer. 
  • Clearance cycle gets shortened – As this system is being implemented, the physical or manual movement of cheques for clearance has ceased. With cheques being transmitted electronically, the settlement process becomes quicker, facilitating reduction in the clearance cycle.
  • The fear of loss of cheques during transfer from the collecting bank to the drawee or payee bank is eliminated.
  • Limitations of the current clearance system with respect to jurisdiction and geography are eradicated. This enables integration and consolidation of several clearing locations across various banks offering different service levels into one standard clearance system applicable throughout the country.
  • CTS helps reduce the scope of fraud significantly. Moreover, the electronic transmission is quick and allows early detection of fraud or any alteration with respect to the payee, amount or the issuer of the cheque. CTS prescribe minimum security features under ‘CTS-2010 standards’ along with superior verification process that further facilitates in the reduction of frauds.
  • The operational efficiency of both the bank as well as the customer is enhanced with the introduction of this system.

Allowance in Salary will also included in PF deducation

Posted in Employees' Provident Fund, EPF, EPFO by
Under the Ministry of Labour and Employment It has been directed that according to new regulation PF(Provident Fund) of a employee should be deducted form  of sum total of  the basic pay and allowances . The new circular will cut the decease the salary of the employees. but that PF amount will  pleasure with you .It will increase the amount of PF deduction but at the same time it same amount will be contributed by Employer which will ultimately help employee in long run

Internal Review of the EPFO ​​in Mumbai on November 30, after meeting all EPF offices across the country it is circular. So far employee contribution is done as   twelve per cent of the basic pay and DA . Following the release of the new circular the  companies who  being manipulate in employee basic salary and break it into different allowance to reduce PF amount will now under pressure . Now for calculating employee PF Basic and other allowance will be added . That means Convenace, medical, education etc these will be the part of PF calculation

Suppose a person’s gross salary is Rs 33. It’s basic salary 25 thousand, 5 thousand and night shift allowance allowance convenyance allowance as 3 thousand .In normal case  PF contributions on basic pay at the level of Rs 25,000 is made that means his PF contribution will be 6000. But according to the new circular allowances are also  attached to the Basic and then PF contribution  will be calculated which will come around 7,920

This nearly 960 bucks in your pocket and the salary will decrease. If there is no employer’s contribution then there will deduction  of Rs 1920 from salary

According to Top government officials,that merely issuing guidelines by Former Central Provident Fund commissioner (CPFC) RC Mishra triggered a controversy by issuing a circular on his last day in office has no relevance; instead amendment in the EPF Act by Parliament is the only way to enforce new norms for PF contributions.

BP Pant, director, labour and employment with the industry body Federation of Indian Chambers of Commerce and Industry (Ficci) said, “EPFO should make amendments to EPF Act and bring in new norms for PF contribution.”

Pant added, “It is a subject of interpretation. The former CPFC issued guidelines to regional provident fund commissioners for widening the ambit of PF contribution and adding in other allowances which are at present not calculated for PF contributions.”

Pant said: “It is good that the government wants to go ahead with it but by merely issuing guidelines, it would only lead to harassment of employers and lead to court cases. The matter is already subjudice before the Madras High Court and the Supreme Court besides other Courts”.

The contribution envisaged under Section 6 with notification dated April 9, 1997, and para 29 of the EPF Scheme specifies the rate of contribution under the EPF Act as 12 per cent

Allowance in Salary will also included in PF deducation

Posted in Employees' Provident Fund, EPF, EPFO by
Under the Ministry of Labour and Employment It has been directed that according to new regulation PF(Provident Fund) of a employee should be deducted form  of sum total of  the basic pay and allowances . The new circular will cut the decease the salary of the employees. but that PF amount will  pleasure with you .It will increase the amount of PF deduction but at the same time it same amount will be contributed by Employer which will ultimately help employee in long run

Internal Review of the EPFO ​​in Mumbai on November 30, after meeting all EPF offices across the country it is circular. So far employee contribution is done as   twelve per cent of the basic pay and DA . Following the release of the new circular the  companies who  being manipulate in employee basic salary and break it into different allowance to reduce PF amount will now under pressure . Now for calculating employee PF Basic and other allowance will be added . That means Convenace, medical, education etc these will be the part of PF calculation

Suppose a person’s gross salary is Rs 33. It’s basic salary 25 thousand, 5 thousand and night shift allowance allowance convenyance allowance as 3 thousand .In normal case  PF contributions on basic pay at the level of Rs 25,000 is made that means his PF contribution will be 6000. But according to the new circular allowances are also  attached to the Basic and then PF contribution  will be calculated which will come around 7,920

This nearly 960 bucks in your pocket and the salary will decrease. If there is no employer’s contribution then there will deduction  of Rs 1920 from salary

According to Top government officials,that merely issuing guidelines by Former Central Provident Fund commissioner (CPFC) RC Mishra triggered a controversy by issuing a circular on his last day in office has no relevance; instead amendment in the EPF Act by Parliament is the only way to enforce new norms for PF contributions.

BP Pant, director, labour and employment with the industry body Federation of Indian Chambers of Commerce and Industry (Ficci) said, “EPFO should make amendments to EPF Act and bring in new norms for PF contribution.”

Pant added, “It is a subject of interpretation. The former CPFC issued guidelines to regional provident fund commissioners for widening the ambit of PF contribution and adding in other allowances which are at present not calculated for PF contributions.”

Pant said: “It is good that the government wants to go ahead with it but by merely issuing guidelines, it would only lead to harassment of employers and lead to court cases. The matter is already subjudice before the Madras High Court and the Supreme Court besides other Courts”.

The contribution envisaged under Section 6 with notification dated April 9, 1997, and para 29 of the EPF Scheme specifies the rate of contribution under the EPF Act as 12 per cent

New cheque system in Indian banking system form 1 Jan 2013 – Cheque Truncation System

Posted in Bank Cheque, CTS cheque, NEW cheque system from 1 Jan 2013 by

Have you wondered why bank has been sedning SMS and call to replace your old cheque book before 1 JAN 2013. the answer is INDIAN bank is moving toward faster and quicker Cheque Clearnce method. This new cheque system is called CTS which stands for Cheque Truncation System
Earler with the instruction of RBI this project was tested as pilot project with some banks across few location in INDIA finally RBI has made it mandatory to use CTS enable cheque book
In this  system the Cheque will be cleared in a day which normally takes days days on an average.
In present context all the cheques are sent directly physical to the respective  bank  to which cheque bleongs to for clearance, but in  this new  System , the banks will send the digital version of cheques to the other bank and the clearance will be done almost same day

Here are few feature listed below by which you can identify whether your cheque book is CTS enable or not

1) All CTS-2010 Cheques will have a watermark with the words “CTS INDIA”, which can be seen against a light

2) It should have a bank logo that will be on cheque with a Ultra Violet Ink , which can be seen only under UV Scanners.

3) The Cheque Truncation System 2010 enabled cheques will not allow any alterations. If there is any mistakes, the cheque will be invalid

4) It should have text  at the bottom of all the cheques “payable at par at all branches of the bank in India”

5) It should have  IFSC and MICR code on the cheque

6) Sign the cheque will a darker ink, so that your signatures are valid for scanning.

7) It should have the wordings “please sign above this line” at right bottom

New cheque system in Indian banking system form 1 Jan 2013 – Cheque Truncation System

Posted in Bank Cheque, CTS cheque, NEW cheque system from 1 Jan 2013 by

Have you wondered why bank has been sedning SMS and call to replace your old cheque book before 1 JAN 2013. the answer is INDIAN bank is moving toward faster and quicker Cheque Clearnce method. This new cheque system is called CTS which stands for Cheque Truncation System
Earler with the instruction of RBI this project was tested as pilot project with some banks across few location in INDIA finally RBI has made it mandatory to use CTS enable cheque book
In this  system the Cheque will be cleared in a day which normally takes days days on an average.
In present context all the cheques are sent directly physical to the respective  bank  to which cheque bleongs to for clearance, but in  this new  System , the banks will send the digital version of cheques to the other bank and the clearance will be done almost same day

Here are few feature listed below by which you can identify whether your cheque book is CTS enable or not

1) All CTS-2010 Cheques will have a watermark with the words “CTS INDIA”, which can be seen against a light

2) It should have a bank logo that will be on cheque with a Ultra Violet Ink , which can be seen only under UV Scanners.

3) The Cheque Truncation System 2010 enabled cheques will not allow any alterations. If there is any mistakes, the cheque will be invalid

4) It should have text  at the bottom of all the cheques “payable at par at all branches of the bank in India”

5) It should have  IFSC and MICR code on the cheque

6) Sign the cheque will a darker ink, so that your signatures are valid for scanning.

7) It should have the wordings “please sign above this line” at right bottom