CTS Full Form

What is the full form of CTS?

The Cheque Truncation System is known as CTS. It is an image-based processing-based electronic verification process. Cheques are cleared using this technique, which is hassle-free, quick, and error-free. The Reserve Bank of India (RBI) has taken this action to expedite the clearance of checks.

Clear To Send is another name for CTS. In response to an RTS (Request to Send) message, it is a signalling message sent by an IEEE (Institute of Electrical and Electronics Engineers) 802.11 Station. The RTS message's sender is able to begin data transfer after the CTS message silences all wireless stations nearby.

This Story also Contains

1. What is the full form of CTS?
2. CTS - Cheque Truncation System
3. History of CTS (Cheque Truncation System)
4. Process Follow in CTS (Cheque Truncation System)
5. Benefits of CTS (Cheque Truncation System)
6. Limitations of The CTS (Cheque Truncation System)
7. CTS: Clear to Send
8. Frame Format of CTS (Clear To Send)
9. Benefits of CTS (Clear to Send)

CTS - Cheque Truncation System

The Reserve Bank of India launched the cheque truncation system as part of an effort to expedite the clearing of checks. It does not require manually moving checks from one bank to another. It is an online image-based system for clearing checks that makes use of photographs of the checks. The drawer bank sends the drawee bank an electronic image of the check together with the MICR (Magnetic Ink Character Recognition technology) number.

History of CTS (Cheque Truncation System)

• The Reserve Bank of India launched the CTS for the first time in the National Capital Region of New Delhi in February 2008 with ten pilot banks. The deadline was set for all banks at the end of April 2008.

• On 24 September 2011, it was initiated in Chennai.

• 2013 saw RBI (Reserve Bank of India) provide the bank's instructions that starting on August 1st, 2013, only CTS-2010 checks will be accepted for clearance. Later, in July 2013, the expiration date was extended to December 31, 2013.

After the migration from MICR to CTS, the traditional MICR-based cheque processing was canceled in the NCR (National Capital Region) and Chennai.

Process Follow in CTS (Cheque Truncation System)

• A scanner, core banking software or other application that complies with the requirements and standards established for data and images under CTS is used by the presenting bank (or its branch) to capture the data (on the MICR band) and images of a cheque for CTS.

• End-to-end Public Key Infrastructure (PKI) has been implemented in CTS to ensure the security, safety, and non-repudiation of data and images. The collecting bank is required to send the data and recorded images to the clearing house (the central processing location) for further transmission to the paying bank after they have been properly signed digitally and encrypted.

• The presenting and paying banks use either the Clearing House Interface (CHI) or Data Exchange Module (DEM) to connect and transmit data and images to the Centralized Clearing House securely and safely to take part in the clearance procedure.

• The data is processed by the Clearing House, which then reaches the settlement and sends the necessary data and pictures to the paying banks. The term "presentation clearing" refers to this. The CCH sends the images and data to the paying banks for further processing via their CHI/DEM.

• The returning bank's CHI/DEM also creates the return file if there are any unpaid instruments. During the return clearing session, the clearing house processes the return file/data that the paying banks transmit in the same way as the presentation clearing, and the return data is then given to the presenting banks for processing.

• Once the associated return-clearing sessions and presentation clearing have been successfully processed, the clearing cycle is deemed to be finished.

• The core of CTS technology is the use of digital images of checks rather than actual checks to process payments.

Benefits of CTS (Cheque Truncation System)

• Faster transaction of cheques that saves time and money

• Rarer chances of transactional mistakes

• Checks are cleared more quickly than in the past

• No reports of misplaced checks

• Cross-state transactions are possible.

• Decreased the chances of fraud related to cheques

• It has taken off the burden from the banks.

• It minimizes the efforts involved in the manual movement of cheques.

• It enhances the operational efficiency of the banking system

• In contrast to conventional techniques, CTS enables consumers to get payments quickly and inexpensively.

• No outstation cheque collection charges are to be charged if the collecting bank and the paying bank are located within the jurisdiction of a similar CTS grid even though they are located in different cities.

Limitations of The CTS (Cheque Truncation System)

Although CTS is a useful method for transferring checks, not all nations have made investments in check truncation technology. This is due to the fact that many locations are emphasizing the gradual phase-out of checks as a form of payment rather than utilizing various kinds of electronic payment systems. Even though cheque truncation slows down processing and lowers costs, the initial buyer must still utilize paper checks. Although touching paper is less necessary with digital photos, this is still a partially obsolete technique when compared to completely electronic payments.

CTS: Clear to Send

The RS-232 standard includes a flow control signal or mechanism called CTS. It shows that a system or line is prepared to transmit data. The RTS (Request of Send) flow control signal triggers the transmission of the CTS signal. The sending device sends the RTS signal to alert the receiving end to prepare for collection. Sending the CTS signal instructs the other end to send the data when the receiving end is prepared to receive. As a result, before beginning the data transmission, the receiver and transmitter can alert each other using CTS and RTS.

Frame Format of CTS (Clear To Send)

There are 4 fields in a CTS frame, namely -

• Frame Control: It is a 2 – bytes control field.

• Duration: It is a 2 – bytes field that specifies the transmission time needed by the data frame.

• Receiver Address (RA): It is a 6 – bytes address field.

• Frame Check Sequence (FCS): It is a 4 – bytes sequence for error detection. Normally, cyclic redundancy code (CRC) is used.

Benefits of CTS (Clear to Send)

• Decreases frame collisions

• Decreased disturbance in the transmission of data and signal

• A rapid and effective response

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