No longer will you be able to use non-CTS cheques and SBI customers will not be able to do so from December 12, while other bank customers will not be able to use non-CTS cheques from January 1. CTS stands for Cheque Truncation System.

SBI also has informed its bank customers that they will not be able receive payments made via non CTS-cheques of other banks. And the customers to this respect have been asked to get their non-CTS cheque book replaced and instead get the new CTS-2010 standard chequebook for free.

CTS cheque: Around three months ago, the Reserve Bank of India had issued a guideline for non-CTS cheques saying that these would be rendered invalid from January 1.

At an earlier stance in July 2018, the procedural guidelines for CTS by the RBI said that the MICR cheque clearing system involved physical movement of cheques from one place to another and the time required during the different intermediate stages increase the overall time of the cheque clearing cycle.

Such cheques were also required to be presented at the bank branch where these are payable due to a restrictive clause in the Negotiable Instruments Act, 1881. But after the changes have been effected since 2002, now the electronic images are required to be presented instead of the physical cheques

The RBI says, "With suitable amendments to The Negotiable Instruments (NI) Act, 1881, The Information Technology (IT) Act, 2000 and The Bankers' Book Evidence (BBE) Act, 1891, the legal framework was put in place for the introduction of cheque truncation and e-cheques in India."

The truncated cheque means, ""a cheque which is truncated during the course of a clearing cycle, either by the Clearing House or by the bank, whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing".

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