The Reserve Bank of India has said that the banks will conduct special clearing operations for annual closure of government accounts on March 31.
The Reserve Bank has issued directions to the banks for smooth clearing operation and asked them to mandatorily participate in it.
With regard to annual closing of accounts related transactions of the central and state governments, special measures are put in place for 2020-21, the RBI has instructed all the member banks to maintain sufficient balance in their clearing settlement account.
In a notification to all scheduled banks along with small finance banks and the National Payments Corporation of India, the central bank said that it is mandatory for all banks to participate in the special clearing operations on March 31, 2021.
It noted that normal clearing timings as applicable to any working Wednesday shall be followed on March 31.
“Further, to facilitate accounting of all the government transactions for the current financial year (2020-21) by March 31, 2021, it has been decided to conduct Special Clearing exclusively for Government Cheques across the three CTS (Cheque Truncation System) grids on March 31, 2021,” said the notification.
Under this, presentation clearing will take place between 1700 to 1730 hrs and return clearing will take place between 1900 and 1930 hrs at the three CTS (cheque truncation system) grids located in New Delhi, Chennai and Mumbai.
The RBI added that all the member banks under the respective CTS Grids are required to keep their inward clearing processing infrastructure open during the special clearing hours and maintain sufficient balance in their clearing settlement account to meet settlement obligations arising out of the special clearing. Besides, it has asked the banks under the respective CTS grids to adhere to the instructions issued to them by the President of the respective CTS grid.
Under the CTS system, there is no need to present a cheque physically for clearance instead, an electronic image is being transmitted to the paying branch through the clearing house, with the relevant data. This eliminates the cost of movement of the physical cheques and reduces time for collection and clearance of cheques.
All government transactions done by agency banks for 2020-21 must be accounted for within the same financial year, the RBI said.
The central bank said all agency banks should keep their designated branches open for over the counter transactions related to government transactions up to the normal working hours on March 31, 2021.