Have you ever thought of your outstation cheque being processed within a single day and amount credited to you by the next day? Ofcourse, most of us youngsters do not prefer to use the traditional modes of transaction such as cheques, but this is still practised in India in high volumes.
Let me come to the point. From next financial year (India), your cheques won’t travel anymore from Chennai to Nagpur, or anywhere else. Instead, their images will. RBI expands Cheque Truncation System (CTS) through out the country. So, how will it be of any use to me?
Tradionally, when you present your grandma’s pension cheque at your bank’s branch, your bank takes it to a place called Clearing house. It is the place where all banks sit together and sort out to pay the cheques deposited to them and get paid for the cheques deposited by them. That’s why banks do no accept cheques after a prescribed time in a day, when they have to transport them physically to the Clearing House. If the cheque is an Outstation cheque, then it is sent to the respective branch at that city and claring takes place. Usually, local cheques are cleared within 3-7 days and oustation cheques within 5-10 days. Such a loooong process uhh??
Here comes the speed clearing, wherein, your outstation cheques will be treated as local cheques, by integrating the database of all branches of your bank. Still, we face delay, better use ATMS 
And thus comes CTS, the fastest clearing process. When you present a cheque, your bank captures the image of the cheque and from that it reads the information such as payee, payer, amount payable, date and all other info. Now the image with other required data is sent to the Clearing House electronically and the clearing process follows. So, the cheque never travels anywhere!! It is even possible to obtain the images of your cheque upon request.
RBI has intitated CTS as pilot project in NCR and Chennai and found it a huge success. And yesterday, it has issued notices to all banks to adpot CTS from April 2012. And, we won’t use the current types of cheques anymore. Special cheques which comply with “CTS – 2010″ will be issued to customers. Infact, few banks have already started using “CTS – 2010″ cheques. What so special about them?
They are printed with length and breadth of every column as per specifications. They contain bank’s logo in invisible ink, watermark, void pantograph (i.e., you wont find anybackground on original cheque but when you photocopy it, you will see “COPY” texted in background).
And finally, why CTS? Because
it reduces the clearing time to an awesome 1 day for local and 2 days for outstation cheques.
it reduces risk loss of theft of cheque during transit.
post CTS all cheques are the same, no local, no outstation.
it reduces cost, ofcourse it all means money
and moreover, it uses information technology 
Due to the RBI’s notice all banks will have to adopt CTS now.
PS: Doubts are welcome.
