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What is the full form of CTS:

CTS represents Cheque Truncation System.

CTS is an acronym for Cheque Truncation System. It is also known as Image based clearing system. CTS is a fast way of clearing the cheques. It was introduced by Reserve Bank of India in the year 2008. The meaning of truncation is stopping some process. Here Cheque truncation means that the physical flow of a cheque which is issued by a drawer is stopped physically. Once the cheque is truncated it should not reach the drawee branch. When the cheque flow is truncated, the physical flow is stopped at some point, and then an electronic image of the cheque needs to be sent to the destination branch or the drawee branch. Along with the electronic image there are other details also which are sent, they are, MICR field details, presenting bank, date of presentation etc.

Whenever a cheque is been sent from the drawer branch, there are many details which are captured electronically, so that the system can maintain a proper flow of the cheque. The details captured are related to the cheque images, data related to magnetic ink character recognition, drawee branch etc.

CTS helps in faster clearance, this helps in increasing the number of cheques which can be processed in a day. Also it provides better verification process and good customer service.

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