R I P Indian MICR Houses

            The curtains for the Indian MICR Clearing Houses came down in October 2014. The last of  our country’s 66 MICR Houses was migrated to the CTS Grid and a glorious chapter in India’s payment systems came to an end

            Any Indian with even a slender connection to Banks must have been exposed to  physical cheques along with their associated ups and downs.

            All the 66 MICR Clearing Houses spread all over Indian were merged into the 3 CTS Grids i.e Western, Northern and Southern.

The clearing and settlement are done purely on the basis of image, instead of physical instruments.

The next target would be to migrate the express cheque clearing systems (ECCS) locations to the nearest CTS Grid.

At present ECCS is present in at 1,339 smaller centres. The ECCS application package is used at centres with low volumes and also enables ‘local’ level clearing for participating banks at that centre. As the volumes are low it is not economically feasible to migrate all the 1,339 ECCS Centres to CTS. The top 25 ECCS centres can be migrated to the CTS Grids.

Brief History of MICR Clearing in india:

The need for MICR Clearing in India was felt in the early 1980’s and the first MICR machine in India was installed in Mumbai in 1986.

The solution was the introduction of Magnetic Ink Character Recognition (MICR) based mechanised cheque processing technology.

The existing cheques had to be redesigned incorporating a MICR codeline4 which could be read by document processing machines called reader-sorters.

The RBI introduced two types of reader-sorters - the Medium Speed Reader Sorters, capable of processing 300 instruments per minute for Inter-city instruments and the High Speed Reader Sorter Systems (HSRS) with speeds of 2400 documents per minute, for the clearing of local instruments.

Driven by mainframe computers the HSRS systems were the state-of-the-art systems available at that time. These were installed in Mumbai (1986) followed by Chennai, New Delhi, (1987) and Calcutta(1989).

By the middle of 1989 MICR cheque clearing operations in the four metropolitan cities had become fully operational and stabilised.

Link 1: infosys.com -Evolution-of-cheques-and-paper-based-clearing-in-India

Link 2:  CPSS RedBook

Rest in Peace – Indian MICR Clearing Houses

Grid CTS Centres