A Operational aspects of clearing system
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One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the Clearing House in the context of Indian banking?
A Clearing House is an arrangement under which member banks exchange cheques and other instruments drawn on each other and settle the resulting inter-bank obligations on a net basis.
What is the National Automated Clearing House (NACH) operated by NPCI?
Centralised web-based platform for bulk and repetitive interbank transactions.
Which organisation manages the cheque clearing system in India at the national level?
The National Payments Corporation of India (NPCI) manages cheque clearing through the CTS (Cheque Truncation System) grids.
What is the concept of 'truncation' in Cheque Truncation System?
Stopping physical cheque movement by transmitting its electronic image instead.
What is Cheque Truncation System (CTS)?
CTS is a cheque clearing system where the physical movement of cheques is replaced by electronic transmission of cheque images to the drawee bank for payment processing.
What is a 'credit clearing' cycle?
Process where funds are transferred to beneficiary accounts via clearing house.
How many CTS grid zones currently operate in India?
India operates three CTS grid zones: CTS-North (New Delhi), CTS-South (Chennai), and CTS-West (Mumbai), enabling pan-India clearing.
What does 'T+1 settlement' mean in the CTS clearing process?
Cheques presented today are settled by the next working day.
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