BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Scanning of the cheques and transmission of electronic image instead of physical cheque in the clearing cycle
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Debiting of drawer’s account through internet
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Both of the above
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None of these
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Detailed explanation-1: -What is Cheque Truncation? Truncation is the process of stopping the flow of the physical cheque issued by a drawer at some point by the presenting bank en-route to the paying bank branch.
Detailed explanation-2: -(b) “a truncated cheque” means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing.
Detailed explanation-3: -Cheque truncation and electric cheques are two different things. In cheque truncation the physical movement of a paper cheque issued stops and electronic flow begins while the electronic cheque is issued electronically and no paper is involved.
Detailed explanation-4: -Cheque truncation is the conversion of a physical cheque into a substitute electronic form for transmission to the paying bank. Cheque truncation reduces or eliminates the physical movement of cheques and reduces the time and cost of processing the cheque clearance system.