What do you mean by cheque truncation?
Cheque truncation:
· Under cheque truncation process, the physical cheque is replaced by the digital image of the cheque after scanning.
· Once the cheque is truncated the physical cheque is treated as cancelled and kept in the records of the collecting bank and from the moment of truncation only the digital image has life.
· The digital image of the cheque which contains the digital signature of a bank officer as to its authenticity is processed by all banks and payment is made.
· Cheque truncation helps in quick processing of the cheques drawn even on distant places since there is no necessity to physically move the cheque from one place to another place.
