Soon, you will be able to cash in other banks' cheques within 24 hours.
The cheque truncation system to be in place by banks will help cash cheques in a day on depositing.
The National Electronic Fund Transfer is expected to launch cheque truncation in Chennai shortly. By using cheque truncation, banks would not have to physically send cheques to another bank, but only transfer an image of the cheque electronically.
This system was launched in the National Capital Region (NCR) in early 2008.
The system helps reduce the customer and banks by reducing the time for processing the cheque. Currently, it takes two days for customers to encash their cheques.
It is estimated that there are about 2 lakh cheque transactions happening in Chennai daily, though the average value of the transaction is not known.
In India a large part of the transactions are still made through cheques and therefore cheque truncation would be useful and efficient. Banks process about 1.2 billion instruments annually.
However this will reduce the float fund for banks as they clear the cheques immediately.
Mr M.S. Raghavan, General Manager, Indian Overseas Bank, told Business Line that the system was advantageous to banks as it will reduce the processing time and manpower required to service customers at the branch level. Automation will cut operating costs.