NCR bags cheque imaging project deal

NCR, technology solutions provider, has won a contract from the Reserve Bank of India (RBI) for supplying clearing house interfaces for cheque truncation project in New Delhi.

The pilot project, to be implemented from April 1, 2006, will involve participation of 83 commercial banks in New Delhi and surrounding towns and cities.

Cheque truncation involves transmission of electronic image of cheques deposited for clearing and will thus eliminate sending of physical cheques, which is a costlier and time-consuming affair.

NCR will also provide the standard application programme interface (API) to facilitate communication between the bank's clearing house and the RBI.

The project entails each bank to have one clearing house interface and the expenditure for this will be borne entirely by the central bank.

NCR's general manager, payments solutions, south-east Asia, Shrihari Bhatt said, "We will begin discussions on the complete system requirement specifications with the RBI tomorrow".

NCR will act as a consultant to the RBI and the banks involved in this project. Although banks do have the freedom to choose their own service provider, they will have to cater to standards set by NCR, in conjunction with the RBI."

With the kickoff scheduled for October 20, NCR will accordingly begin implementation of the electronic cheque presentment image exchange and the image mark archive for the RBI.

Bhatt also pointed out that NCR has put up standards related to image quality, security and interfaces. Depending upon their branch network, banks will have to incur an expenditure ranging from Rs 50 lakh to Rs 15 crore.

In fact, bankers foresee the emergence of shared networks to rationalise costs. Software expenditure will be determined by the number of available licences and usages.

For instance, if a bank needs to install hardware for cheque truncation at the individual branch level, it will cost the bank approximately Rs 3 lakhs. If it plans to invest in software for 1,000 of its branches, it will need to shell out an amount of Rs 2 crore.

A senior official with a leading public sector bank said, "Banks have not yet assessed the totality of volumes involved. They also need to take into consideration the networking and bandwidth costs."

So, while banks such as HDFC Bank, ICICI Bank, Citibank are already registered with NCR and are prepared for the rollout, the State Bank of India is still in the evaluation stage and will decide upon the solution provider by December, 2005.