The
benefits of CTS are not yet visible to the general public. Once the
Southern Grid is fully operationalized, the change will be clearly
noticeable.
As
per RBI FAQ’s on CTS, the new approach is the Grid Based approach,
wherein the whole country will be divided into Grids.
As
a beginning, Chennai Grid has been operationalized in March 12, with
few banks of Bangalore and Coimbatore joining it. Like all good
things in life, it will be a while, before all Bangalore/Coimbatore
Bank branches are on the CTS Grid.
Eventually,
the Chennai Grid will cover Bank Branches in Tamil Nadu, Kerala,
Karnataka, Andhra Pradesh and the Union Territory of Puducherry.
In
my view, the major benefit of CTS will be enhancement of the coverage
of the Speed Clearing.
Let
me explain in detail.
The
below table contains list of few Co-operative with exclusive presence
in Tamil Nadu or in Coimbatore/Chennai cities.
|
Sample List of Co-operative
Banks
|
|
|
COIMBATORE CITY COOP.BANK
LTD
|
Coimbatore
|
|
COIMBATORE DIST.CENTRAL
COOP.BANK LTD
|
Coimbatore
|
|
COIMBATORE DIST.CENTRAL
COOP.BANK LTD METTUPALAYAM
|
Coimbatore
|
|
METTUPALAYAM COOP.URBAN
BANK LTD
|
Coimbatore
|
|
PALLAVAN GRAMA BANK LTD
|
Coimbatore
|
|
POLLACHI COOP.URBAN BANK
LTD
|
Coimbatore
|
|
TAMILNADU INDUSTRIAL
COOPERATIVE BANK LTD.
|
Coimbatore
|
|
CHENNAI CENTRAL CO-OP. BANK
LTD.
|
Chennai
|
|
GEORGE TOWN CO-OPERATIVE
BANK LTD.(GTC)
|
Chennai
|
|
TAMILNADU INDUSTRIAL
COOPERATIVE BANK LTD.
|
Chennai
|
|
TAMILNADU MERCANTILE BANK
LTD.
|
Chennai
|
|
TAMILNADU STATE APEX CO-OP.
BK. LTD.
|
Chennai
|
Suppose
a Bangalore based customer-(holding account with ABC Bank) receives a
cheque drawn on COIMBATORE CITY COOP.BANK LTD
|
Sr.No
|
The Present
|
The Future
|
|
|
01)
|
Customer deposits it in ABC
Bank Branch
|
No Change
|
|
|
02)
|
ABC Bank branch forwards it
to their Bangalore Service Branch
|
No Change
|
|
|
03)
|
ABC Bangalore service
branch, forwards cheque to their Coimbatore service branch
|
Change
|
Cheque
is lodged under CTS Grid Clearing. The image is transmitted to
COIMBATORE CITY COOP.BANK LTD branch
|
|
04)
|
ABC Coimbatore service
branch presents in local clearing
|
Change
|
This step is
eliminated
|
|
05)
|
Status
- If ‘return’, the physical cheque is sent back to ABC
Bangalore service branch.
|
Change
|
This step is
eliminated
|
|
06)
|
Status - If ‘no return’,
amount is credited to the customers account.
|
No Change
|
|
The
Benefits:
- Reduction in TAT for credit to the customer.
- Enhancement of Scope of Speed Clearing i.e., Co-operative Banks/RRB’s/LAB’s/ Other Banks still not part of Speed Clearing
- Increase of volumes processed under CTS.
- Boost for financial inclusion, as citizens residing in remote/small places with access only to Co-op Banks/RRB’s can also get the benefits of faster realization of cheques.
Streamlining
of few areas:
Paper
to Follow – The less the ‘paper to follow’, requests, the more
will the efficiency of the CTS will increase.
- One recent Finance Ministry Notification should reduce the ‘paper to follow’, instruments to Government Departments i.e Controller General of Accounts (CGA) directed all payments above Rs 25,000 to suppliers, contractors, grantee and loan institutions to be directly credited to their bank accounts. This is with effect from 01/04/2012.
- As the participants gain experience of the CTS environment IQA Failure cases would go down.
Bank Holidays under NI Act:
Regional Holiday
and Blockage
The Grid
Jurisdiction will fall under different states, and the states have
different holidays calendars.
The CTS
Application has a “Blockage” function in the system to handle
different state holidays, for a ‘value date’. The blockage
prevents other banks to present any cheques on the branch / bank put
under blockage.
In addition, it
gives extension to all unexpired items drawn on such branches and
banks for the blockage period.
The branches /
banks under blockage can not lodge any fresh presentation during the
blockage period.
New
Returns Reasons under Cheque Truncation System (CTS)
Reason
No Reason Description
82 Bank/ Branch blocked
83 Digital Certificate Validation failure
92 Bank Excluded
