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1. What is Cheque Truncation System?

Truncation is the process of stopping the flow of the physical cheque issued by a drawer
to the drawee branch. The physical instrument will be truncated at some point en-route
to the drawee branch and an electronic image of the cheque would be sent to the
drawee branch along with the relevant information like the MICR fields, date of
presentation, presenting banks etc. Thus with the implementation of cheque truncation,
the need to move the physical instruments across branches would not be required,
except in exceptional circumstances. This would effectively reduce the time required for
payment of cheques, the associated cost of transit and delay in processing, etc., thus
speeding up the process of collection or realization of the cheques..

2. What type of cheques can be presented for clearing through CTS?

All types of CTS Compliant & Non-Compliant cheques can be presented for clearing
through CTS. It is no different from the use of traditional clearing infrastructure for
clearing paper cheques.

3. Will there be any change in the process for the customers?

No. There is no change in the clearing process for customers. Customers continue to
use cheques as at present, except to ensure the use of image-friendly-coloured-inks
while writing the cheques. Of course, such of those customers, who are used to
receiving the paid instruments (like government departments) would also receive the
cheque images. Cheques with alterations in material fields (explained in detail later) are
not allowed to be processed under the CTS environment.

4. If a customer desires to see the physical cheque issued by him for any
reason, what are the options available?

Under CTS the physical cheques are retained at the presenting bank level and do not
move to the paying banks. In case a customer desires, banks can provide images of
cheques duly authenticated. In case, however, a customer desires to see / get the
physical cheque, it would need to be sourced from the presenting bank, for which a
request should be made to his/her bank. An element of cost / charge may also be
involved for the purpose. To meet legal requirements, the presenting banks which
truncate the cheques need to preserve the physical instruments for a period of 10 years.

5. How are the images of cheques taken?

Images of cheques are taken using scanners. Scanners also function like photo-copiers
by reflecting the light passed through a narrow passage on to the document. Images are

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classified as black and white, gray-scale or colour based on how the pixels are
converted into digital values. For getting a gray scale image the pixels are mapped onto
a range of gray shades between black and white. The entire image of the original
document gets mapped as some shade of gray, lighter or darker, depending on the
colour of the source. In the case of black and white images, such mapping is made only
to two colours based on the range of values of contrasts.

6. What is Paper to Follow (P2F) and why is it required?

Paper to Follow is an operational convenience in CTS wherein the drawee bank can
request for the physical instrument in case of any doubt or suspicion about the nature of
The drawee bank can request presenting bank for physical instrument, in case, the
image it has received for processing is not clear.
For Government cheques, Paper to follow is mandatory, since Government
Departments continue to receive paid instruments.
The presenting bank can send physical instrument to the drawee bank if in case it is
identified that the image has failed IQA validation.

7. How would customer benefit from cheque truncation?

Bank customers benefit in the following ways, if their bank participates in CTS
a) Faster realization and Credit;
b) Extended presentment Window
c) Improved reconciliation services for Corporate Customers and Government
d) Reduction in Geographical dependence.
e) Reduced operational risk due to inbuilt security in the workflow
f) Faster Customer Services- reduced TATs on Service Requests, queries and MIS

8. What is the model adopted by our Bank for processing on inward and
outward clearing?
We have adopted processing of outward clearing in decentralized mode. Instruments
received in Inward clearing is being processed centrally at State level RCC




9. Who will open the zones for the branches?

Respective State Level RCC (SLR) will open the zones one day before for the branches
under their jurisdiction. Zones will be available to all the branches which have been

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added to their service branch SET ID. In case any new branch added in the grid, it also
needs to be added in the respective Set Id. The concerned Circle Office has to raise a
call through SPSD for the same.

10. Will the range of zones allotted to RCC work for all the branches?

Yes, all the zones open by RCC will be available to all the branches under its
11. If one zone (say-CTO181) is being used by a branch for lodgment of
instruments, whether the same can be used by another branch?

Yes, branches can simultaneously use any of the zones opened by their SLRCC (State
level RCC).

12. What happens if we change the MICR code of the instrument while doing
entry in Finacle (OCTM Menu)?

If we change the MICR Code of the instrument while doing entry in the CBS (MICR
Code 110024010 is entered as 110024001), then during the scanning, instrument will
go to the rectify stage from where user shall be required to do manual entry. Further
the concerned branch must raise a call through SPSD for the addition of MICR
Code in CBS.
13. In which cases, addlist file (txt file) will not be generated in CBS?

Following are the possibilities when file will not be generated by CBS.
1. When ilink is not open.
2. While generating the file, please ensure to enter the zone code in Capital Letters
i.e., CTO181
3. If all the instruments are not verified.

14. How do we generate the file in CBS?

For generating the file in Finacle, use menu option PTW and sub option U .Go to PR
copy the desired file like CTS99SSSS15572.txt , PTW-T for transferring the file to local
PC at c:\outward.
15. What happens if one will upload the wrong addlist file in CTS?

If one will upload the wrong addlist file in CTS, then all the instruments will go to rectify
stage. Therefore, please ensure to upload the correct file in CTS Application.

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16. What password will be used for scanning application, in case scanning PC
is not password protected?

In this case, you have to create a password for a scanning PC and the same will be
used by the scanning software. Steps to create a password:
Right click on My Computers Click on Manage Go to local Users & Group
Right Click on Users. It will give an option for Set Password. You can set the password
for the System.
17. Which instruments will go to the rectify stage?

Instruments which generally go to the rectify stage are.

1. When Scanner is not able to read the MICR Line on the instrument.
2. When details of the instruments lodged in Finacle does not match with the MICR
details of the instruments.

18. What action should be taken by the branches, if scanner rejects all the
MICR fields of the instruments?

If scanner rejects all the MICR fields of the instruments, it may be due to an alert that
cheque is fraudulently printed/photocopy. Such cheque should be rescanned and if on
rescanning all MICR fields are rejected again, instead of repairing all MICR field
manually instrument should be scrutinized properly and only after being fully satisfied it
should be processed in CTS. Guidelines in this regard has already been issued vide
circular no. HO/ITD/17/2013 dated: 02.09.2013:

While scanning, the capture system sometimes may reject all MICR fields. This
may be due to an alert that the cheque is fraudulently printed/photocopy. Such
cheque should be rescanned and if on rescanning also all MICR fields are
rejected, user instead of routinely repairing all rejected MICR fields manually
should refer the matter to incumbent in-charge. The incumbent Incharge must
carry out due diligence on the intended transaction and only after being fully
satisfied should permit in writing manual repair of MICR fields rejected by capture

19. What is the process to be followed if instruments go to Rectify tab?

You have to manually enter details of MICR field as well as Non-MICR fields-1 i.e.
Account Number and account name for those instruments which appear in Rectify field
and press enter, it will automatically go to Transaction.

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20. How can we identify P2F instruments before sending the file to Grid
Service branch?

During verification of Cheques, the system shows type of the document. (Doc type B is
normal Cheque and Doc type C is paper to follow cheque). The user can well identify
P2F instruments at this stage. User can also generate the report of P2F instruments
from report server.
21. What are the major reports available in CTS application related to outward
All the reports related to CTS clearing are available on
Major reports which are available in CTS Application related to outward Clearing are as


a) Outward Presentation: Four types of reports are available in Outward

Accepted at CHI.
Accepted at CH.
All rejected.
b) Paper to Follow Reports.
c) Government Cheques.
d) IQA Failure.
e) CH duplicates MICR Cheque.
f) Other Failure.


All the instrument returned in Outward and Inward Clearing are available in return report
link. Following types of reports can be generated for outward return:
a) Inward Return
b) Inward Return P2F

22. What is the next step after Scanning of the instruments?

After scanning of the instruments, go to the END BATCH and login in to the web
application by using URL:
23. Can we scan more cheques in the same batch in to the software after
ending the particular batch?

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No, after ending the batch, we cannot scan more instruments in to the same batch.
24. Can be accessed through all the PCs in the

Yes, it can be accessed through all the PCs in the branches.

25. How we transfer the file from branch to the Grid Service Branch?

After completing the verification in CTS Application, go to HOME (link available in, Click on Process Data, a message will be displayed on the
screen DATA IS TRANSFERRED which will confirm that file, is sent to the Grid
Service branch.
26. Is it necessary to send the images of the cheque which are IQA Failure?
Yes, Physical paper will be sent along with the images in case of IQA failure
instruments and Government Cheques.
27. What action will be taken by the branches for Paper to Follow (P2F)
instruments after completion of the whole procedure?

Branches will send the P2F instruments (Physical paper) to the Service Branch (RCC)
for further sending to the Clearing House within the time line defined by NPCI.
28. What are the Clearing timings for the Western Grid?

The CTS is capable of supporting different types of clearing. Each type of clearing will
have a separate clearing window known as clearing session. Initially there will be one
presentation clearing session and one corresponding return clearing session per day.
The clearing timings for these sessions are as follows:

Clearing Session Weekdays Saturdays

Presentation Clearing Session 16:30-19:30 hrs 14:30-16:30 hrs
Return Clearing Session 16:30-17:30 hrs 15:30-16:30 hrs
Paper to follow (P2F) Session 19:30-20:30 hrs 16:30-17:30 hrs

29. How will branches get assured that the instruments presented by them
have been accepted at CHI?

You can see the following reports of outward presentment in report module (using URL:
All instruments presented by the branch
No of instruments accepted at CHI
No. of Instruments accepted at Clearing House (CH)
Rejected instruments

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30. What the branch will do when instruments are rejected at CHI level?
Branches should delete the entry of the respective instruments in finacle also before
suspension of Zone.

31. Who will suspend the zone?

Branch will suspend the zone after getting confirmation that all the instruments
presented by their branch have been received at CHI successfully.

32. What are the important activities to be done every day by the branch?

Branches have to ensure following things on daily basis:

1. After sending the file to the Grid Service Branch, please see the report module
whether all the files send by the respective branch has been accepted at CHI
(Clearing house Interface). Further please check the report of the instruments
Other Failure to tally the instruments lodged by them in the finacle in the next
day and delete those instruments from CBS which are not accepted by CHI so
that it should not be released by LCC, Mumbai causing customer complaints.

2. After getting confirmation from the report module that the all files sent by
your branch have been accepted at CH (Clearing House) level, then you
should suspend the zone (mandatory) through MCLZOH-S.

3. The following day please check your account whether the same amount of
clearing has been debited & credited to nullify the entry.

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Lodgement of Cheques in CBS:

A. Lodgement of instruments through OCTM in CBS individually in the zones (eg: CTO121,
CTO122,) open by the state service branch.

B. Verification of the instruments by the concerned officer through OCTM-V.

C. Generation of file by the operator after complete verification to be uploaded in CTS Application
through PTW-U. The following steps will be as under:

I. PTW : Enter
II. U : F4
III. Sol id : Enter the sol id of the branch and press F4
IV. Zone Code : Enter Zone Code (capital letters) and press F4
V. Zone date : Enter Zone Date and press F4
Following message will be displayed on the screen LST file is generated

I. To Quit from PTW option : Enter Q and press F4

II. PR : Enter
III. Press Ctrl+E (^E)
IV. Copy the relative file name through text dump by selecting the file name & path and pressing
V. Press F3 to quit this option
VI. Go to PTW T to copy the file in PC. For this I link web with 9999 must be running on your
VII. The system will ask the file name to be copied.
VIII. Press Ctrl V or Right Click of mouse and use paste option. Press F4
IX. The system will again ask for the destination directory.
X. Enter the name of directory c:\outward and press F4. This will copy the file in your
destination directory.

After data entry, verification and creation of file in Finacle, user is required to commence the operation in
CTS Application for transmission of outward clearing to grid service branch for consolidation and onward
submission to drawee branch through the Clearing House in following steps:

1. Login to the CTS Scanning Application with User Id and Password (same as that of PC).
2. Click on Scan Button followed by selecting Business Date and click OK to proceed.

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3. Select the Remitting Bank, Remitting Branch & Select Clearing Type.
4. Upload the text file (generated from CBS) from c:/upload and click on Start Batch Button. Place
all the cheques in the tray of scanner for further processing.
5. After scanning of all the cheques three options to be followed:

5.1. Transactions: When all the particulars like MICR Code, Cheque No., TC Code
available in the instrument matches with the text file as uploaded entered in CBS.
5.2. Rectify: When the particulars does not match the instrument will comes under this
bucket. User has to manually feed all the particulars not picked up during scanning like
amount, account number, MICR Code etc , automatically it will come in the transaction
5.3. IQA Fail: On double clicking, the software will ask for Rescan, Accept & Reject.
User has to act accordingly.

6. Use has to click the end batch button for further processing of the batch. Exit from the
7. Open the web based application by using URL
8. Login to the application by entering valid user id and password.
9. Click on upload CXD file. It will upload the file of scanned instruments as stated above. Maker
will exit from the application.
10. Verifying Officer will login to the application with user-id and password and click Transactions
followed by Checker. Above all the officer will also fix his/her digital signature for passing the
11. User has to check each and every instrument and will apply digital signature to make the data &
images in encrypted form and validate that the file is correct.
12. At the end user will come to home page and has to click Process Data for completing the
activity for consolidate at consolidation server and onward submission to NPCI (Clearing

D. After completing the whole process as stated above and confirm from LCC, Mumbai the branch
user will suspend the zone (mandatory) through MCLZOH-S.

E. The next following day user of the branch check their imprest account whether the same
amount of clearing has been debited & credited to nullify the entry. Further the branch has to
check the report of the instruments Accepted at CHI and Other Failure to tally the
instruments lodged by them in the finacle in the next day. Further delete those instruments from
CBS which are not accepted by CHI so that it should not be released by LCC, Mumbai causing
customer complaints.

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