From April-01-2013, RBI’s CTS 2010 complaint Cheque collection will come into force. However, some banks have already started CTS based Collections on a trial basis and the results are terrible.

I deposited a cheque in Punjab National Bank, Hubli Karnataka to be collected from Citibank, Bangalore. The Cheque mentioned it is CTS 2010 complaint but I guess it was not because it was printed by Citibank in Singapore and in the normal manual collection process it would get collected in Citibank, Bengaluru Branch.

However, this time PNB presented the Cheque in CTS 2010 Complaint Scanner Machine and it failed. The Passbook Entry in PNB shows “CTS IQA Failure“. So what exactly is CTS IQA Failure ? I contacted the RBI and they sent a Fax as follows,

The banks need to perform IQA validations at the capture system. Each image shall have an IQA indicator tag indicating the outcome of the IQA test carried out by the capture system.

The threshold values for different IQA parameters shall be intimated to the banks by the Clearing House from time to time. The banks should take care to synchronize the IQA parameters at the capture system, to avoid excessive rejection at the CHI.

Instruments that fail IQA test may be rescanned. Instruments (images) which do not pass the IQA test need to be handled through “Paper to Follow” model, with IQA indicator flag ‘off’. (Refer para 3.24 on Paper to Follow) However, this option should be used only in extreme circumstances when it is not possible to meet the IQA standards by rescanning and not as a matter of routine. The IQA Fail & IQA Pass report is made by CHI as a daily report. The capture system of the bank may also generate an IQA report
for its enhanced control.

RBI is not very clear on whom the penal provisions should be invoked in such cases. I hope it is the Cheque Issuing Bank which should be penalized for failing to adhere to RBI Guidelines.