Law · Negotiable Instruments Act and CTS

Under the Cheque Truncation System (CTS) operational framework in India, consider the following statements regarding the duties and liabilities of collecting and truncating banks: Statement I: The truncating bank (collecting bank) is legally obligated under Section 6 of the Negotiable Instruments Act to ensure that the electronic image transmitted to the drawee bank is a true and accurate representation of the physical cheque. Statement II: If a collecting bank fails to detect a material alteration that was apparent on the physical instrument but not visible in the low-resolution image transmitted, the collecting bank is held liable for negligence. Statement III: The responsibility of the collecting bank ends once the electronic image is successfully uploaded to the clearing house and a digital acknowledgment is received. Statement IV: According to RBI guidelines, collecting banks must transmit cheque images without any encryption protocol. Statement V: The collecting bank is exempt from checking endorsements on the back of the cheque during CTS clearing. Which of the statements given above are correct?