Banking · Cheque Truncation System
A bank submits a batch of mixed value cheques for clearing through the Cheque Truncation System (CTS) process. One of the cheques received is drawn on a non-CTS compliant branch in a remote area, which must be processed. What is the type of technology primarily used to process standard cheques in CTS, the maximum number of days typically allowed for the return of a non-CTS cheque in clearing, and the status of the physical cheque in the CTS process?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Technology: MICR and Image Processing; Return Days: 10 days; Physical Cheque Status: Physical Cheque is destroyed immediately after scanning.
- 2Technology: Image Processing; Return Days: 7 days; Physical Cheque Status: Physical Cheque is stopped (truncated) at the presenting bank's clearing house.✓
- 3Technology: Barcode reading; Return Days: 3 days; Physical Cheque Status: Physical Cheque is retained at the paying bank's branch.
- 4Technology: MICR recognition; Return Days: 1 day; Physical Cheque Status: Physical Cheque is moved across centers for settlement.
Correct answer
Technology: Image Processing; Return Days: 7 days; Physical Cheque Status: Physical Cheque is stopped (truncated) at the presenting bank's clearing house.
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