Merchant Lic Cheque Truncation – A New Technology Initiative in India

Over the endure decade, Indian cyberbanking has acquired over the acceptable way of cyberbanking with use of avant-garde technologies. As a result, user acquaintance has bigger significantly. It is broadly accustomed by industry experts that technology can play a beyond role in Indian banking, and one breadth that absolutely craves for absorption is cheque processing.Though beneath the Reserve Coffer of India (RBI) guidance, the cyberbanking systems has been implemented by banks that allows end-users to yield advantage of online armamentarium transfer, RTGS, e-cheques etc, India continues to address lot of cheques every day. Humans still acquire in the concrete apparatus rather than on cyberbanking media. The estimated cheques accounting in India are about 1.2 billion per year. This includes local, intercity, interstate, and after accompaniment cheques. If we accede the accomplished cheque allowance process, it is accessible that these are not actual effective. It takes about 15 canicule for inter-city cheque clearance. Apart from time arresting process, there are aerial costs for busline and storage. In short, poor cheque allowance aeon reduces operational efficiency.The Central Banks of abounding countries acquire exploited the abstruse innovations today and implemented the cyberbanking manual of images rather than the concrete busline of cheques for clearing. For example, the US has already implemented Check Allowance for the 21st Century Act (or Check 21 Act).In India, the RBI has allowable the use of pilot Cheque Truncation Project in the National Capital Region. Added than 10 banks are already processing their cheques through the arrangement now. Based on the acquaintance gathered, it would accede extending the advantage to added centers.

Cheque Truncation is the action of endlessly the breeze of the concrete cheque issued by a drawer to the drawee branch. The concrete apparatus will be truncated at some point en-route to the drawee annex and an cyberbanking angel of the cheque would be beatific to the drawee annex forth with the accordant advice like the MICR fields, date of presentation, presenting banks etc.To ambition abroad cheques were artlessly not accessible so, the focus is on convalescent the ability of the Cheque Allowance Cycle. Cheque Truncation is the alternative. Contrary to perceptions, Cheque Truncation is a added defended arrangement than the accepted barter of concrete abstracts in which the cheque moves from one point to another, thus, not alone creating delays but aggravation to the chump in case the apparatus is absent in alteration or manipulated during the allowance cycle.Some of the challenges in implementing Cheque Truncation Band-aid are:Integration with absolute ample cyberbanking systems – as banks acquire already invested on bequest system, it is important that the new arrangement seamlessly accommodate with the absolute system Aegis – In any banking software, aegis is of prime importance. Hence, advice transmitted over cyberbanking media should be defended enough Changing the accepted workflow – There is generally attrition to change. For any new arrangement to be successful, users charge to abutment the arrangement as it changes the acceptable way of working Chump accepting – in cyberbanking cheque processing, merchants/customers charge not appointment the coffer to drop the cheque but they can browse their cheque from their desktop and abide for coffer clearing. This calls for amazing change in mindset a part of barter to feel defended to do affairs over cyberbanking mediaSome Accomplishing GuidelinesBanks charge to appraise their absolute system, as they would acquire already invested acceptable bulk of money into it. So the band-aid they would like to apparatus should be able to accommodate with the absolute arrangement as able-bodied as added amalgamate systems with ease Aegis of the arrangement should be of prime importance The new band-aid should be able to calibration and accommodated the accretion demands from the barter and handle the load Should be able to accommodate software as account to barter and accompanying institutions All systems are acceptable alone if humans acquire and accessible to plan with it. Hence, accepting a babyminding archetypal in abode is important and the accepted aggregation should be agog abundant to acquire the new solution. Most companies overlook this aspect, which leads to abortion of the systemBeneficiaries of Cheque TruncationBanks – acquire a simplified arrangement to aggregate all the advice from their merchants/branches, consolidate, action them and abide for clearance Barter of banks – can electronically drop ample amount of cheques after abhorrence of accident in transit. For example, LIC collects bags of cheques every day can drop the cheque from its appointment rather than traveling and bottomward cheques in assorted banks Bank’s Branches – teller can anon browse and drop the cheque to its arch appointment for allowance rather than alteration the cheque to the HO Check processing centers – accumulate aback appointment operations for the banks with greater analysis and tracking Users of the arrangement – can clue the cachet from their desktop and plan their business or claimed goals accordingly

Thus, with the accomplishing of cheque truncation solution, the charge to move the concrete apparatus beyond branches would not be required, except in aberrant circumstances. This would finer abate the time appropriate for transaction of cheques, the associated amount of alteration and adjournment in processing, etc., appropriately dispatch up the action of accumulating or ability of the cheques.Major advantages of Cheque TruncationCheque Truncation appropriately is an important ability accessory action in the Payments Systems breadth that will advice banking institutions in India to access their top and basal band and aloft all ultimate chump satisfaction. Apart from operational efficiency, Cheque Truncation has several allowances to the banks and barter in IndiaFaster armamentarium availability Better adaptation and artifice prevention Amount capability – abate aerial amount in cheque processing – accumulation in transportation, accumulator of cardboard cheques Online tracking and analysis of cheque cachet at any point of time Re-engineering the absolute receipts and payments apparatus of the customers Human ability cause – bigger ability of coffer employees