What changed
RBI set a firm deadline: all cheques issued from March 18, 2013 must conform to CTS-2010 standards. Non-CTS cheques in circulation get a four-month extension until July 31, 2013. Banks must not charge savings account customers for first-time CTS cheque issuance. Lending banks must stop accepting fresh PDC/EMI cheques in locations with ECS/RECS facility and convert existing ones.
What it means for you
Banks must accelerate replacement of old cheques and ensure all new issuances are CTS-2010 compliant. The free first-time issuance rule impacts cost recovery for savings accounts. The PDC/EMI restriction shifts lending banks toward electronic mandates, reducing cheque usage in ECS-enabled areas. Non-compliance risks clearing disruptions after July 31, 2013.
What you must do
- Issue only CTS-2010 standard cheques from March 18, 2013 onwards
- Provide first CTS-2010 cheque book free to all savings bank account customers
- Launch awareness campaigns via SMS, letters, branch displays, internet banking, and website to recall non-CTS cheques
- Submit monthly progress report on CTS migration to RBI by 10th of succeeding month
- Stop accepting fresh PDC/EMI cheques in ECS/RECS-enabled locations and convert existing ones to electronic mandates
Who it affects
All Scheduled Commercial Banks including RRBs, Urban Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks, Local Area Banks
Can we still accept non-CTS-2010 cheques from customers after March 31, 2013?
Yes, non-CTS-2010 cheques already with customers remain valid and will be accepted in all clearing houses, including CTS centers, until July 31, 2013. However, all new cheques issued by banks from March 18, 2013 must be CTS-2010 compliant.
Are we required to charge customers for the first CTS-2010 cheque book?
No. RBI mandates that banks shall not charge savings bank account customers for the first issuance of CTS-2010 standard cheques. For additional issuances, banks may follow their existing policy as per their Fair Practices Code.
What should we do about existing PDC/EMI cheques in locations where ECS is available?
You must stop accepting fresh PDC/EMI cheques in such locations and make all efforts to convert existing PDCs into ECS/RECS (Debit) by obtaining fresh mandates from borrowers.