Discuss various ways in which cheque truncation is done ? (Please Answer in 100 to 150 Words )
Cheque truncation Is a system that facilitates the electronic processing of a cheque with the use of its scanned image, the Magnetic Ink Character Reader (MICR) along with other cheque authorizations instead of the cheque’s physical movement to the payee's bank.
There are various ways in which banks can participate in Cheque truncation
1. Direct membership: where banks become immediate members of the CTS after fulfilling all the essential conditions.
2.Indirect membership: some banks participate indirectly by utilizing others’ CHI infrastructure to carry out CTS activities
3.Sub- membership: the banks under this category add themselves as sub- members under the direct members of the Clearing House and use their CTS infrastructure.
4.Service Bureau: some banks utilize the capture infrastructure put up by the service bureau
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