What Is Truncated Cheque?

Cheque truncation is a cheque clearance system that involves the digitalisation of a physical paper cheque into a substitute electronic form for transmission to the paying bank. The process of cheque clearance, involving data matching and verification, is done using digital images instead of paper copies.

What is the meaning of truncated Cheque?

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.

At what point the cheque is truncated?

According to the Negotiable Instruments Act a truncated cheque is 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 production of an electronic image for the transmission, substituting the further material ...