RBI to initiate CTS project in Delhi

Hyderabad, Sep 2 (UNI) The Reserve Bank of India(RBI) will take up a pilot 'Cheque Truncation System(CTS)' project in New Delhi in December, RBI Governor Y V Reddy said here today.

''The CTS is a major initiative of the RBI, as far as funds movement is concerned in order to improve efficiency and subtantially reduce time taken for cheque processing'', he said while delivering the key-note address on ''financial inclusion'' at the Institute for Development and Research in Banking Technology.

Referring to the mechanised cheque processing using MICR technology, he said the overall reject rates was around one per cent against international rates of around two per cent.

The evaluation of the Real Time Gross Settlement(RTGS) system, vis-a-is the critical evaluation parameters set by the Bank for International Settlements, Basle indicated that ''we are close to the best in most of the parameters'', he added.

Highlighting the security features of the National Electronic Funds Transfer System(NEFT) which facilitated receipt of funds by customers within two hours of settlement, Dr Rao, who presented IDRBT Banking Technology Awards to leading banks, said the RBI had taken up as its mission, provision of the NEFT facility initially at all the RTGS customer-enabled branches and thereafter extending the same to cover all computerised branches of banks in the country.

The facility for inter-banks funds settlement through RTGS was available across more than 23,700 branches of banks, spanning more than 500 centres in the country, with average daily values aggregating more than Rs 60,000 crore, he said, adding that ''There is still potential to shift many more systemically important payments to the RTGS route''.

He said the banks should ensure that all customer payments in financial markets must flow into the RTGS, such as payments in equity and debt markets.

He urged the banks to make extensive use of the 'National Financial Switch' facility set up by the RBI through the IDRBT, which was also revamping the entire Indian Financial Network(INFINET) structure in consultation with users to make it work efficiently in tune with international practices.

UNI SM KVV 1625