Under the Cheque Truncation System, a cheque is scanned at the bank where it is deposited, and the image — not the paper — travels to the paying bank for clearing. The physical cheque stops moving.
Introduced in India by the Reserve Bank of India, CTS cut clearing from a matter of days to broadly overnight, because an image can be transmitted instantly where paper had to be couriered.
Why it standardised the cheque
If a machine is going to read an image of a cheque, the image has to be predictable. That is the reasoning behind CTS-2010, the specification Indian banks now issue cheques to. It fixes:
- The cheque size — 202 x 93 mm
- Where each field sits
- Paper quality and the void pantograph in the background
- The position of the MICR band
Which is why there is no meaningful difference between an HDFC cheque format and an SBI one — see the Indian cheque format.
What it means if you print cheques
Your printing is going to be read as an image, by machine, before any human looks at it. Three practical consequences:
- Stay inside the fields. Text drifting across a box division may pass a human eye and fail a scanner. This is why boxed date digits need the left margin right — see fixing alignment.
- Print clearly. Faint or streaky output that a person could puzzle out may not survive scanning. A near-empty toner cartridge is a false economy on a cheque.
- Keep off the MICR band. Non-magnetic ink over magnetic characters breaks machine reading.
Non-CTS cheques
Older cheque books that predate the standard were withdrawn from clearing. If you find an old book in a drawer, do not assume it is usable — check with your bank.
Beyond India
Truncation is not unique to India; many countries now clear cheques from images. What varies is how far the format has been standardised alongside it. The Gulf, for instance, has nothing equivalent to CTS-2010 — which is precisely why Emirates NBD, FAB and Dubai Islamic Bank all use different cheque sizes.
