Industrialists in Indore are seeking relaxation from Cheque Truncation System (CTS) 2010 this month as this system is creating delay in payments.
"We have also written to the RBI Governor and discussed the issue with prominent local bankers and the response, so far, as been positive," said president of Association of Industries Madhya Pradesh (AIMP) Hemant Mehtani.
According to RBI website, truncation is the process of stopping the flow of the physical cheque issued by a drawer at some point with the presenting bank en-route to the drawee bank branch.
In its place an electronic image of the cheque is transmitted to the drawee branch by the clearing house, along with relevant information like data on the MICR band, date of presentation, presenting bank, etc.
The new system was implemented to make the process faster but at present, it takes around 6-7 days for cheque clearance, said industrialists.
"Industrialists need to take care of various advance taxes in March and other tax responsibilities like income, service, excise, VAT and entry tax and the delay at this time is creating lot of problems," added Mehtani.
The association has requested relaxation for the new system in March and suggested ways through which this can be implemented in the coming months.
