General Studies · Cheque Truncation System
Under the NPCI guidelines for Cheque Truncation System (CTS), if a presenting bank transmits a truncated image that is clear but contains a discrepancy between the MICR band data and the actual visual image of the cheque amount, which of the following describes the operational liability?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The drawee bank is solely responsible for verifying the physical characteristics of the cheque and must request the physical instrument for all transactions exceeding ten lakh rupees.
- 2The presenting bank is responsible for the accuracy of data entry, and if a mismatch occurs, the drawee bank has the right to return the cheque due to image and data mismatch.✓
- 3Once a cheque is truncated, the physical instrument is held in the custody of the NPCI for ten years and the drawee bank cannot question the data.
- 4The settlement is final once uploaded to the clearing house and cannot be returned by the drawee bank.
Correct answer
The presenting bank is responsible for the accuracy of data entry, and if a mismatch occurs, the drawee bank has the right to return the cheque due to image and data mismatch.
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