Cheque Truncation is the process of stopping the physical movement of cheques.
As per the amended Negotiable Instruments Act 1881, in cheque truncation, the movement of the physical instrument is stopped and replaced by electronic images and associated MICR line of the cheque.
Benefits
- Faster clearing cycle
- Better Customer Service - Enhanced Customer Window T+0 for Local Clearing and T + 1 for inter-city clearing.
- Faster Realization and Credit