What changed
RBI reviewed migration progress and found large volumes of non-CTS-2010 cheques still in circulation despite earlier deadlines. From January 1, 2014, separate clearing sessions for these cheques will operate at Mumbai, Chennai, and New Delhi CTS centers, starting thrice weekly and tapering to once weekly by November 2014. Non-CTS-2010 cheques presented in regular CTS clearing will be returned with reason code 37 and must be re-presented in the special session.
What it means for you
Banks face operational changes: they must educate customers about longer realization times for non-CTS-2010 cheques and update their Cheque Collection Policies. Drawee banks returning non-CTS-2010 cheques in regular clearing must use reason code 37, and collecting banks must re-present them in the next special session. RBI will monitor volumes and may levy penalties for non-compliance under the Payment and Settlement Systems Act.
What you must do
- Educate customers about delayed clearing for non-CTS-2010 cheques due to less frequent special sessions.
- Update your Cheque Collection Policy to reflect the new clearing arrangement for non-CTS-2010 instruments.
- Ensure drawee banks return non-CTS-2010 cheques in regular CTS clearing with reason code 37.
- Set up customer complaint handling mechanisms for issues arising from this change.
- Continue presenting non-CTS-2010 cheques in ECCS and MICR CPCs until those centers are operational.
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, Customers using non-CTS-2010 cheques
What happens if a non-CTS-2010 cheque is presented in regular CTS clearing after January 1, 2014?
The drawee bank will return the cheque with reason code 37, meaning it must be presented in the proper zone. The collecting bank must then re-present it in the next special clearing session for non-CTS-2010 instruments.
How often will the special clearing sessions for non-CTS-2010 cheques be held?
Initially from January 1 to April 30, 2014, sessions are thrice weekly (Monday, Wednesday, Friday). From May 1 to October 31, 2014, they reduce to twice weekly (Monday and Friday). From November 1, 2014, sessions are once weekly (every Monday).
Can banks still use Express Cheque Clearing System (ECCS) for non-CTS-2010 cheques?
Yes, banks can continue to present non-CTS-2010 instruments in ECCS centres and MICR CPCs until those centres are operational.