Cheque Truncation – Paper to Follow (P2F) workflow.


 

Participants associated with Cheque Truncation System (CTS) are familiar with the P2F workflow.

Concise outline of Cheque Truncation:

Cheque Truncation is the process in which the physical movement of a cheque within the bank, between the banks or between the banks and the clearing house is curtailed or eliminated, being replaced in whole or in part, by electronic records of their content (with or without the images) for further processing and transmission.

The term ‘‘Truncate’’ means to remove an original paper cheque from the cheque collection or return process and send to a recipient, in lieu of such original paper cheque, a substitute cheque or, by agreement, information relating to the original cheque (including data taken from the MICR line of the original cheque or an electronic image of the original cheque), whether with or without subsequent delivery of the original paper cheque.

Cheque Truncation compels any party in the chain to truncate any cheque (business or commercial) and convert it to an image at the presenting bank level.

In a truly 100% CTS Scenario, P2F does not exist. But, in our country as we are still progressing towards 100% CTS, P2F is a vital part of the CTS process.

Briefly, P2F is applicable in the following scenarios:

(a) Government Cheques

(b) IQA Failure

(c) When the instrument has been returned by the drawee bank with reason – Image not clear, present again with paper) or reason – Present with document

Naturally, both the presenting bank and the drawee bank have to be in the same city to facilitate P2F.

CTS 2010 cheques to a large extent will minimize CTS Cheque returns with the reason IQA failure or image not clear.  However, till the Government amends its rules, Government Departments require physical cheques.

 

As CTS is introduced in clearing locations, the existing infrastructure of the MICR Clearing centres is disbanded and also the physical space vacated is occupied by other institutions. In most of the cities, the Clearing Houses are located in the heart of the commercial areas, hence command a hefty premium. The local MICR/Non-MICR Clearing houses were run by Lead Banks in the area, and once CTS comes in, they are relocating their staff.

Hence, in majority of the cases, they are reluctant to support the P2F activities. P2F processing takes place in the late evening i.e 7pm to 10pm, which is another deterrent for the existing Clearing Houses to support the P2F activities.

In order to maintain the smooth functioning of CTS, NPCI has proposed to adopt the agency arrangement basis to handle the P2F process at each of the Grid CTS centres on behalf of NPCI.

All the member banks of the local clearing house have to be present in the P2F session, even if the presenting bank has no P2F cheques to handover, as the bank representative physical presence is required,   to receive P2F cheques from other banks.

The CTS has is expected to go live Pan-India very soon, with various agencies running against time, to have the necessary infrastructure i.e Place and Personnel in place.  The following is an indicative list, where the CTS is expected to be live in the next 6 months.

Western grid P2f Centers

1 CHHATTISGARH – RAIPUR

2 GOA – GOA

3 GUJARAT – AHMEDABAD

4 GUJARAT – SURAT

5 GUJARAT – VADODARA

6 GUJARAT – RAJKOT

7 GUJARAT – JAMNAGAR

8 GUJARAT – BHAVNAGAR

9 GUJARAT – ANAND

10 MADHYA PRADESH – INDORE

11 MADHYA PRADESH – BHOPAL

12 MADHYA PRADESH – GWALIOR

13 MADHYA PRADESH – JABALPUR

14 MAHARASHTRA – PUNE

15 MAHARASHTRA – NAGPUR

16 MAHARASHTRA – NASIK

17 MAHARASHTRA – KOLHAPUR

18 MAHARASHTRA – AURANGABAD

19 MAHARASHTRA – SOLAPUR

 

Northern grid P2f Centers

1 ASSAM – GUWAHATI

2 BIHAR – PATNA

3 JAMMU & KASHMIR – JAMMU

4 JHARKHAND – RANCHI

5 JHARKHAND – JAMSHEDPUR

6 ORISSA – BHUBANESWAR

7 ORISSA – CUTTACK

8 PUNJAB – LUDHIANA

9 PUNJAB – JALANDHAR

10 PUNJAB – AMRITSAR

11 RAJASTHAN – JAIPUR

12 RAJASTHAN – JODHPUR

13 RAJASTHAN – UDAIPUR

14 RAJASTHAN – KOTA

15 RAJASTHAN – BHILWARA

16 UTTAR PRADESH – LUCKNOW

17 UTTAR PRADESH – KANPUR

18 UTTAR PRADESH – AGRA

19 UTTAR PRADESH – VARANASI

20 UTTAR PRADESH – ALLAHABAD

21 UTTAR PRADESH – GORAKHPUR

22 UTTARAKHAND – DEHRADUN

 

 

South-eastern grid P2f Centers

1 ANDHRA PRADESH – HYDERABAD

2 ANDHRA PRADESH – VIJAYAWADA

3 ANDHRA PRADESH – VISAKHAPATNAM

4 CHANDIGARH – CHANDIGARH

5 KARNATAKA – BANGALORE

6 KARNATAKA – MANGALORE

7 KARNATAKA – MYSORE

8 KARNATAKA – HUBLI

9 KARNATAKA – BELGAUM

10 KERALA – ERNAKULAM

11 KERALA  – TRIVANDRUM

12 KERALA – TRICHUR

13 KERALA – KOZHIKODE

14 PUDUCHERRY – PONDICHERRY

15 TAMILNADU  – COIMBATORE

16 TAMILNADU – MADURAI

17 TAMILNADU – SALEM

18 TAMILNADU – TIRUCHIRAPALLI

19 TAMILNADU – TIRUPUR

20 TAMILNADU – ERODE

21 TAMILNADU – TIRUNELVELI

22 WEST BENGAL  – KOLKATA CPC

5 thoughts on “Cheque Truncation – Paper to Follow (P2F) workflow.”

  1. How come an officer can attend this late evening sessions after working 9-10 hous in Bank?? Is it not against labour law to engage some one for 12-13 hours continuously …. ???
    Its ridiculous.

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