The cheque truncation guidelines of Reserve Bank of India have come into effect from December 1.

The new guideline suggests that any cheque brought to the bank bearing alterations will not be entertained. The users in this case have to issue a fresh cheque.

The guideline is applicable for cheques under CTS. CTS is currently only operative in the clearing house of RBI located in the National Capital Region (NCR). The clearing houses in other places use the MICR method for clearing cheques.

Any cheque dealt under arrangements such as MICR clearing, non-MICR clearing, over-the-counter collection (for cash payment), or even for direct collection of cheques outside the Clearing House arrangement will not fall under this guideline.

CTS refers to a method of cheque clearance and settlement on the basis of electronic images or data or both without any physical exchange of the instrument.