This eventually faded out and is now replaced with the electronic movement of cheques, thus ensuring security, reliability, and overall better customer experience.Quick guide on how to complete iob rtgs form fillingįorget about scanning and printing out forms. The traditional system involved physical movement of the cheques, and calculations done by the bank clerks. Thus, the strange term CLG, which you have seen in your bank statements, actually stands for clearing and has a long and fascinating history, to begin with. The image contains certain relevant information such as the data on the MICR band of the cheque, the date of presentation of the cheque, etc.
In CTS, instead of physical instruments, an electronic image of the cheque is transmitted to the paying bank branch, through the clearinghouse. This also helps eliminate the scope of loss of instruments during transit and other logistics-related issues. The CTS helps provide better service to customers by speeding up the process of collection of cheques. Hence, the Cheque Truncation System (CTS) was introduced by the Reserve Bank of India. In a country where, despite all fast, real-time electronic methods of fund transfer exists, cheque transactions still take a prominent position in fund transfer. The traditional system was, however, prolonged. Over decades, improvements were made in the process all banks now had their clearinghouses or the branches of Central Bank or other public banks acted as one. Special Clearing Houses started operating in America, where bank clerks used to sit around oval tables, and on the manager’s signal, completed their assigned transactions and at the end would have the net amount of funds owed to their banks. Several different variations and improvisations of this system existed until the mid-nineteenth century. The traditional system involved the actual movement of cheques by the bank clerks, after the bank hours, who maintained the records of the money that was owed to their banks and the amount their banks owed to other banks. Money transaction through cheques has been present since the 1600s in England. It involves turning the promise of money, usually in the form of cheques, or electronic payment requests, into the actual transfer of funds from one bank account to another. In the above example, the person who gave you the check made a commitment for a transaction, and the banks settled the transaction, this complete process is known as clearing.
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