Mumbai, June 20: Viewing to enhance efficiency in cheque clearing, the Reserve Bank of India introduced Cheque Truncation System on Thursday, facilitating the presentation and payment of cheques without their physical movement.
“P2F has been discontinued for CG cheques with effect from February 2016. Taking this initiative forward, it has now been decided in consultation with the Office of the Comptroller & Auditor General of India, to dispense with the current requirement of forwarding the paid State Government cheques in physical form to the state government departments”, the statement reported.
However the presenting banks are required to preserve the physical instruments in their custody securely for a period of 10 years as required under Procedural Guidelines for CTS. The revised guidelines would be effective in respect of cheques issued by the State Governments from July 01, 2019 and made applicable for those, which give their consent for withdrawal of P2F arrangement.
“As and when State Governments give their consent, the same will be advised to the banks. In case any state desires to have a parallel run, the same may be done for a period not exceeding three months”, it said further adding that during the parallel run period, P2F shall continue to remain operational and the drawee banks should forward both the physical instruments and their images to concerned Treasury as desired by them.