Module: General Practice
Q44: Consider the following assertion and reason regarding the "Deemed Approval" mechanism in CTS 2026.
Assertion (A): In Phase 2 of the CTS Continuous Clearing, if a drawee bank does not confirm the status of a cheque within 3 hours of presentation, it is automatically treated as passed/paid.
Reason (R): The Reserve Bank of India aims to shift the burden of verification entirely to the Presenting Bank to reduce the workload on Drawee Banks.
Reason (R): The Reserve Bank of India aims to shift the burden of verification entirely to the Presenting Bank to reduce the workload on Drawee Banks.
✅ Correct Answer: C
Assertion (A) is True: The "Deemed Approval" mechanism is a core feature of the 2026 Continuous Clearing rules.
If the drawee bank is silent for T+3 hours, the system assumes the cheque is good for payment to prevent delays.
Reason (R) is False: The burden of verification (checking signatures, balance, stop payments) remains strictly with the Drawee Bank.
The rule does not shift this burden to the Presenting Bank; rather, it enforces operational discipline on the Drawee Bank to verify faster.
The goal is efficiency, not a transfer of liability.
If the drawee bank is silent for T+3 hours, the system assumes the cheque is good for payment to prevent delays.
Reason (R) is False: The burden of verification (checking signatures, balance, stop payments) remains strictly with the Drawee Bank.
The rule does not shift this burden to the Presenting Bank; rather, it enforces operational discipline on the Drawee Bank to verify faster.
The goal is efficiency, not a transfer of liability.