Chennai, May 1 (KNN) The cheques which are not magnetic ink character recognition (MICR) compliant, will be cleared only on Mondays and Fridays instead of three days a week.

The deadline to switch over to the new format bank cheques under the cheque truncation system (CTS) ended yesterday. 

MICR is a character-recognition technology used mainly by the banking industry to ease the processing and clearance of cheques and other documents. 

The banks are likely to take four days or more from the date of deposit to credit the amount. 

The Reserve Bank had instructed all banks to implement the CTS system across the country by March 2013.

A year has passed, but its implementation is yet to fall in place.

However, from January this year, the clearing arrangement for the non-CTS instruments was reduced to three sessions a week.

The system will reduce transaction time from a few days to a few minutes and, by taking the physical instrument out of the process, enhance security and reduce the cost of transferring and processing cheques. 

The states of Tamil Nadu, Kerala, Karnataka, Andhra Pradesh and the Union territory of Puducherry will implement the system under the Chennai grid. (KNN/SD)