Consider the following regarding the benefits of Cheque Truncation System CTS 1 Quick...........

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Consider the following regarding the benefits of Cheque Truncation System (CTS).

1) Quicker clearance

2) Nation-wide standard clearing system

3) Financial sector development

4) Improving the effectiveness of the monetary policy

5) Reducing the country’s risk profile.

Which of the given above statement (s) is/ are correct?

1, 3 and 4

2 and 5

1, 2, 3 and 5

1, 2, 3, 4 and 5

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Explanation:

All of the above statements are correct.

Cheque Truncation System (CTS) is used by the banks to stop the movement of a physical cheque from the bank where it is presented to the bank which had issued it.
Under this system, an electronic image of the cheque is transmitted to the drawee branch along with the necessary information inputs like Magnetic Ink Character Recognition (MICR) code, date of presentation and details of the bank presenting the cheque.