Module: | CTS & Positive Pay Framework
Q17: Which of the following statements accurately describe the mechanics of "Cheque Truncation"?
1. It involves stopping the physical movement of the cheque and replacing it with an electronic image for clearing.
2. The "Truncation Point" refers to the specific location (e.g., branch or processing center) where the physical cheque is scanned.
3. The physical cheque is immediately destroyed at the counter upon acceptance.
2. The "Truncation Point" refers to the specific location (e.g., branch or processing center) where the physical cheque is scanned.
3. The physical cheque is immediately destroyed at the counter upon acceptance.
✅ Correct Answer: B
Cheque Truncation is the process of stopping the physical flow of the cheque and transmitting an electronic image instead.
The location where this scanning occurs is the "Truncation Point". Statement 3 is incorrect; the physical cheque is retained by the presenting bank for a specific preservation period, not destroyed immediately.
The location where this scanning occurs is the "Truncation Point". Statement 3 is incorrect; the physical cheque is retained by the presenting bank for a specific preservation period, not destroyed immediately.