The Hindu Business Line : RBI fiat to banks opens biz window for vendors

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RBI fiat to banks opens biz window for vendors

V. Rishi Kumar

Newgen Software bags a fair chunk of pilot projects

Stiff competition
Of the 84 banks based in the Delhi region, about 25 banks have already chosen vendors
Out of these 25 projects, Newgen software has bagged 12 despite competition from the likes of NCR and Unisys

Hyderabad , Sept. 24

The Reserve Bank of India's mandate to banks in Delhi to implement cheque truncation systems (CTS) by December has them rushing to software vendors.

Of the 84 banks based in the Delhi region, which has been taken up as a pilot project by the RBI for cheque truncation system, about 25 banks have already chosen vendors.

The Vice-President of the New Delhi-based, Newgen Software, Mr Puneet Jain, told Business Line that potential for cheque truncation solutions is huge, both in India and globally and offers a service provider such as Newgen to tap into this potentially growing market opportunity.

"From the Indian perspective, the Delhi project has been taken up as a pilot by the RBI. Of the 84-odd banks in Delhi, 25 of them have thus far chosen vendors. Amidst stiff competition from the likes of NCR and Unisys, Newgen has bagged 12 of the 25 projects thus far awarded. These include, Bank of America, Bank of Novo Scotia, HSBC, ABN Amro, Kotak Mahindra Bank among others," he explained.

Process description

Cheque truncation is a process where a bank digitally captures the cheque on to the system and retains the physical cheque handed to it by the customer. The data thus captured is transferred to other banks or the clearing-house. Based on the cheque sent digitally, the cheque is honoured, thereby facilitating faster settlement.

For software vendors, there is a huge opportunity globally and in India. Though the Delhi project has been taken up on a pilot basis in India, this is likely to be deployed across the country, offering opportunities for technology vendors.

Newgen, a workflow and document management products and services provider, apart from servicing the emerging opportunity in India, is targeting potential in the United Arab Emirates, Africa and the Asia Pacific region, Mr Jain said.

Explaining the advantages CTS brings to banks, he said: "Cheque truncation curtails the physical movement of cheque within a bank, between a bank and the clearing-house by replacing it with electronic records both for processing and transmission. After Delhi, metros of Mumbai, Kolkata and Chennai may be mandated."

Related Stories:
`Cheque truncation to speed up banking'

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