Operational Aspects of Handling Clearing Collection Cash | Banker’s Special Relationship | PAPER II – PRINCIPLES & PRACTICES OF BANKING | MODULE A: GENERAL BANKING OPERATIONS
Banking Operations and Legal Aspects Banker - Operational Aspects and Legal Rights 1. Clearing, Collection, and Cash Clearing involves the process of settling payments between banks. The collection refers to receiving payment from a customer's cheque or draft. Cash management is a core banking activity involving receipt, payment, and secure custody. 2. Cheque Truncation System (CTS) CTS is a project by RBI for faster cheque clearing. Under CTS, physical cheques are truncated at the presenting bank and an electronic image is sent for processing. 3. RBI Guidelines on Collection of Instruments RBI mandates timelines for cheque clearance, compensation for delays, local and outstation cheque handling, and special arrangements for senior citizens and disabled persons. 4. Cash and its Custody Cash must be securely held in strong rooms or safes, with dual custody, periodic balancing, and insurance coverage to pre...