RBI mandates pan-India Cheque Truncation System by Sept 2021
Current · Source: Reserve Bank of India · RBI/2020-21/107 · issued 15 Mar 2021 · ~2 min read
Quick answerRBI has directed all banks to bring every branch under image-based Cheque Truncation System (CTS) by September 30, 2021, ensuring uniform cheque clearing across India. Banks must submit a roadmap and status report by April 30, 2021.
The rule, in the simplest words
By September 30, 2021, every bank branch in India must use the Cheque Truncation System (CTS – a way to clear cheques using pictures instead of moving the paper cheque around).
Banks must send a plan and a progress report to RBI at [email protected] by April 30, 2021.
Banks can choose how to set up CTS, like putting machines in every branch or using a hub-and-spoke model (one main branch handles pictures for nearby branches).
This rule applies to all banks: commercial, rural, cooperative, payment, and small finance banks.
How it plays out — a real example
Rajesh, a branch manager at a rural bank in Madhya Pradesh, used to tell customers their cheques would take over a week to clear because his branch wasn't part of any formal clearing system. After this rule, he works with the RBI regional office to set up a hub-and-spoke model, where his branch sends cheque images to a bigger city branch. Now, his customers get their money in just two days, and Rajesh feels proud to offer the same fast service as city banks.
What changed
RBI extended CTS to all bank branches nationwide, requiring every branch to participate in image-based clearing under respective grids by September 30, 2021. Previously, CTS covered about 1,50,000 branches, but some branches remained outside formal clearing, causing delays and higher costs for customers.
What it means for you
Banks must now ensure all branches, including those in remote areas, are CTS-enabled, eliminating the need for physical cheque movement. This will speed up cheque clearing, reduce costs for customers, and standardize the experience across India. Banks can choose their deployment model, such as hub-and-spoke, but must coordinate with RBI regional offices.
What you must do
Ensure all your bank branches are CTS-enabled under respective grids by September 30, 2021.
Submit a roadmap for pan-India CTS coverage and a status report to RBI at [email protected] by April 30, 2021.
Choose and implement a suitable model (e.g., hub-and-spoke or branch-level infrastructure) and coordinate with RBI regional offices.
Inform RBI of any challenges or delays in achieving full CTS coverage.
Who it affects
All Scheduled Commercial Banks including Regional Rural Banks, Urban Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks, Local Area Banks, Payment Banks, Small Finance Banks, National Payments Corporation of India
❓ Common questions
What is the deadline for all branches to be under CTS?
All bank branches must participate in image-based CTS under respective grids by September 30, 2021.
What should banks submit to RBI by April 30, 2021?
Banks must submit a roadmap to achieve pan-India CTS coverage and a status report to [email protected].
Can banks choose their own model for CTS implementation?
Yes, banks are free to adopt a model of their choice, such as deploying infrastructure in every branch or using a hub-and-spoke model, and must coordinate with RBI regional offices.
📜 Read the original circular — full text as issued by RBI
RBI/2020-21/107
DPSS.CO.RPPD.No.SUO 21102/04.07.005/2020-21
March 15, 2021
The Chairman and Managing Director / Chief Executive Officer
All Scheduled Commercial Banks including Regional Rural Banks /
Urban Co-operative Banks / State Co-operative Banks /
District Central Co-operative Banks / Local Area Banks / Payment Banks /
Small Finance Banks / National Payments Corporation of India
Madam / Dear Sir,
Extension of Cheque Truncation System (CTS) across all bank branches in the country
Please refer to the Statement on Developmental and Regulatory Policies dated February 5, 2021 wherein Reserve Bank of India (RBI) had announced pan-India coverage of CTS by bringing all branches of banks in the country under image-based CTS clearing mechanism.
2. The CTS is in use since 2010 and presently covers around 1,50,000 branches. All the erstwhile 1219 non-CTS clearing houses (ECCS centres) have been migrated to CTS effective September 2020. It is, however, seen that there are branches of banks that are outside any formal clearing arrangement and their customers face hardships due to longer time taken and cost involved in collection of cheques presented by them.
3. To leverage the availability of CTS and provide uniform customer experience irrespective of location of her/his bank branch, it has been decided to extend CTS across all bank branches in the country. To facilitate this, banks shall have to ensure that all their branches participate in image-based CTS under respective grids by September 30, 2021. They are free to adopt a model of their choice, like deploying suitable infrastructure in every branch or following a hub & spoke model, etc. and concerned banks shall coordinate with the respective Regional Offices of RBI to operationalise this.
4. Banks are advised to inform us ( [email protected] ) the roadmap to achieve pan-India coverage of CTS and submit a status report before April 30, 2021.
5. This directive is issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
Yours faithfully
(P Vasudevan)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2020-21/107 · issued 15 Mar 2021. The plain-English explanation above is BankPulse’s own independent summary.
Ensure all your bank branches are CTS-enabled under respective grids by September 30, 2021.
Choose and implement a suitable model (e.g., hub-and-spoke or branch-level infrastructure) and coordinate with RBI regional offices.
📜 Compliance
Submit a roadmap for pan-India CTS coverage and a status report to RBI at [email protected] by April 30, 2021.
Inform RBI of any challenges or delays in achieving full CTS coverage.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Branch Manager at a bank this circular applies to (All Scheduled Commercial Banks including Regional Rural Banks, Urban Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks, Local Area Banks, Payment Banks, Small Finance Banks, National Payments Corporation of India), your first concrete step on “RBI mandates pan-India Cheque Truncation System by Sept 2021” is: “Ensure all your bank branches are CTS-enabled under respective grids by September 30, 2021.” (RBI issued this 15 Mar 2021).
Circular: RBI/2020-21/107 -- RBI mandates pan-India Cheque Truncation System by Sept 2021
Issued: 15 Mar 2021
Action required: Ensure all your bank branches are CTS-enabled under respective grids by September 30, 2021.
Action required: Submit a roadmap for pan-India CTS coverage and a status report to RBI at [email protected] by April 30, 2021.
Action required: Choose and implement a suitable model (e.g., hub-and-spoke or branch-level infrastructure) and coordinate with RBI regional offices.
Action required: Inform RBI of any challenges or delays in achieving full CTS coverage.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12039&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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