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CTS Cheque Truncation System

CTS (Cheque Truncation System) Definition 

CTS or Cheque Truncation System, also known as ICS (Image-based Clearing System) in India, was introduced by the Reserve Bank of India (RBI) in 2008. (Learn about the recent Digital e-Rupee launched by RBI). It is a modern system that enables electronic cheque processing using MICR (Magnetic Ink Character Reader) data and scanned cheque images, removing the need for physical cheques. 

CTS (Cheque Truncation System) Meaning 

'Truncation' refers to making something shorter. In the context of CTS, it refers to the digitization of the cheque clearance process in Indian banking. CTS replaces the physical clearance process with a faster, safer digital process using cheque images. 

Cheque Truncation System Process 

The process of CTS involves a systematic method for clearing cheques in banks. See the process flow of CTS in the image below: