What is cheque truncation all about?
February 21, 2008 Cheque Truncation Solution is a big milestone in the Indian banking industry. It enables cheque clearing on the same day, reducing floating time available for funds. The technology, being implemented from February 1 in the National Capital Region, enables banks to send images instead of paper cheques for clearing and settlement. The US-based NCR Corp was mandated by the Reserve Bank of India to prepare the truncation project for the capital region. In an interview to Prashant K Sahu, South Asia General Manager Navroze Dastur asserts that cheque truncation will benefit both customers and banks, and help reduce frauds. What is cheque truncation all about? Instead of manually moving the cheque from one bank to another for payment, we would now use images. This will bring down the time required for processing. Earlier, it would take two to three days. Cheques would now be cleared on the same day or the next day, thereby bringing efficiency into the entire banking system.
