Cheque Truncation System (CTS)

Cheque Truncation System (CTS) is the project undertaken by Reserve Bank of India for faster clearing of cheques.

CTS will bring in huge benefits to customers by substantially reducing the time taken to clear the cheques as well as to the banks by increasing operational efficiency by cutting down on overheads in physical cheque clearing by using cheque image, instead of the physical cheque. The cheque image is truncated at the presenting bank. Subsequently, the cheque image moves through various steps in the cheque-clearing cycle and transactions are settled on the basis of images and the data.

Cheque Truncation System (CTS) consists of a data and image-capturing application with high speed, mid-range and small shoe box-sized image scanner.

Solution Overview

CTS is capable of capturing the data and images of the cheque as per RBI guidelines. At the same pass, it also endorses the index (a Unique Identifier - UI) or other configurable characters on the rear of the physical items.

CTS can be easily configured to perform various basic yet essential validations of the items during the point of capture. Validations such as valid bank-branch codes, cheque number, check digits (if any) and many other fields can be easily included.

Value Proposition

  • Proven product - Being used by leading banks in many countries
  • Hardware independent - Can drive all major reader sorters /Transports
  • Ability to advise Banks in areas ... Operations, Legal, Technical & Security
  • Advise on CTS Architecture best suited to your requirements
  • Flexible to Bank's Outsourcing Strategy and Supports Multiple Business Model
  • Centralised Inward Cheque Processing & Outward Clearing
  • Relationship Manager Module (Online Rejects and Referrals - OLRR)
  • Intercity Cheque Clearing
  • Virtual Replacement to Current Sorting Process
  • Interfacing with variety of systems
  • Ability to provide other value-added services

Key Features

  • Simple and user-friendly graphical user interface
  • Support various scanners like Canon, Teller, Unisys, etc.
  • Bitonal Front & Back, Grey scale images
  • Automatic encoding and endorsing
  • Automatic CAR/LAR extraction capability through sophisticated ICR engines
  • Extensive Search Options for items captured
  • Data file encryption before transmission to service branch/Clearing House
  • Inline Image Quality Assurance (IQA) and Image Usability Assurance ( IUA) capability
  • Unique transaction follower procedure to identify status of cheques presented
  • Outward returns re-presentment batch runs
  • Better reconciliation and fraud prevention
  • Basic reports
  • Role based access administration
  • Feature to track the productivity and efficiency of the user
  • Enables user to avoid duplicate MICR cheques
  • Enables high productivity because of its easy to use feature
  • Archival component responsible to clean the application and store data and image for future enquiry and report generation.
  • Customer Relationship Management for Priority and High Net-worth Accounts by watching out for Cheque returns from Central Inward Processing Centre and alerting the Relationship Managers (RMs).
  • Alerting and prompting action of RMs on cheques returns due to insufficient funds.
  • Email and SMS alerts to RMs on transactions of Accounts of their interest
  • MIS Reports
  • Flexibility to support different Architectures, such as:
    • De-centralized
    • Centralized
    • Hybrid

CTS interfaces with variety of systems both internal and external to the Bank

  • Clearing House
  • Core Banking System by online and batch uploads
  • Credit Card Management System
  • Cash Management System
  • Signature Capturing System
  • Electronic Clearing System
  • Optical Character Recognition (OCR) Engine
  • Dividend - Warrant Management System
  • Cheque Deposit Machine


The cheque truncation system is protected by comprehensive PKI-based security architecture. On top of the PKI technology, the security architecture also incorporates basic security and authentication controls such as dual access control; user ID and passwords with cryptobox and HSM (Hardware Security Machine).

System Audit Logs

CTS maintains comprehensive security logs of the system. All important operations within CTS are tracked and stored in log with date, time and user details.

Transaction Status

On the transaction level, the status of the individual incoming and outgoing batches are tracked and displayed. This allows users to quickly identify the batches that require attention (e.g. balanced, unbalanced, etc).