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Your Cheques can be Permanently Banned after January 1, 2019, Here's what should you do

A  very big change is about to hit the Indian banking sector, as a particular type of cheques faces permanent ban after January 1st, 2019.

Non-CTS Cheques Will Be Banned

December 31st is the last day of using
Non-CTS cheques for account holders of all banks including SBI (State Bank of India), HDFC, Punjab National Bank, ICICI, Bank of Baroda and others. Non-CTS cheques have been banned by RBI starting January 1, while these cheques will be invalid for customers of SBI from December 12.

RBI had issued a notice about three months ago, stating that Non-CTS cheques will be regarded as invalid starting January 1. Following this, HDFC had sent out a circular to notice its customers regarding discontinuation of separate sessions for clearance of non-CTS cheques. Similarly, the Punjab National Bank informed their customers to replace their non-CTS compliant cheques.

What is CTS?

CTS is the abbreviation of Cheque Truncated System, which in simple terms means stopping the physical transport of cheques midway. Instead, an electronic image is generated for transmission of the amount, thus truncating the journey of the cheque by the Clearing House.

RBI’s procedural guidelines stated that cheque clearing systems involved physical movement of the cheque from one bank to another thus elongating the overall process of encashing the cheques at each stage of the clearing cycle. Also, as per a restrictive clause in the Negotiable Instruments Act, 1881, the cheques were required to be presented at the drawee branch for clearing.

The RBI says, “With suitable amendments to The Negotiable Instruments (NI) Act, 1881, The Information Technology (IT) Act, 2000 and The Bankers’ Book Evidence (BBE) Act, 1891, the legal framework was put in place for the introduction of cheque truncation and e-cheques in India.”

What steps are to be taken now?

SBI customers should encash any Non-CTS cheques before December 12, customers of other banks can encash before December 31.

Every account holder must deposit their non-CTS cheques and cheque books in their respective branch and get new cheque leaves or books as per the new CTS 2010 standard. Remember, the new cheque books are free of cost.

In the years to come, keeping in mind the cost overheads, banks will probably ban the usage of cheques altogether. It looks like banks have taken a progressive step forward with the goal of digital, cashless India in mind.

All Cheques Will Be Banned In India?

Last year around the same time, we had reported a possibility: Cheques can be altogether banned in India, under Digital India push.

However, cheques are still pretty much active in India, and an important financial tool as well.


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  1. A picture of CTS and Non-CTS Cheques should have been shown in the article so that the readers would get the exact idea off the CTS and Non-CTS Cheques.

    1. Yess, of course I think it's very important for the understanding also..

  2. What is CTS or Non CTS cheque

  3. Simply. close. all Banks, All problem solved...

  4. Important message. What these cheques look like show the image as well.

  5. Cheques are a must for business as terms of payment are different in different sectors. People accept post dated cheques at the time of supply which are later on banked. Stopping cheques altogether is no solution.


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