Imation to tap cheque truncation market

Imation India has taken note of the huge potential that
exists in the cheque truncation solutions market and has formed a strategic
partnership with US-based Digital Check Corporation (DCC) to tap this market.

As per the alliance, Imation will distribute Digital Check's
TellerScan cheque scanners in India. Imation in turn is roping in Spice Net to
re-distribute them in the Indian market. Spice Net, the new re-distributor for
these products was earlier known as Modi Olivetti and has been working on the
concept of passbook printer since 1992.

According to Ajit Karunakaran, Country Manager, Imation
India, the cheque truncation business is ready to gather speed because of the
Reserve Bank of India (RBI) directives. The RBI has embarked on an ambitious
Cheque Truncation System (CTS) project which will enable banks to clear
outstation cheques quickly and efficiently.

AJIT KARUNAKARAN To leverage on RBI's  ambitious cheque  truncation plans

In CTS, transactions are settled on the basis of images and
electronic data sans the physical movement of instruments. It allows a financial
institution to truncate cheques at the 'Point of Capture' by providing the
capabilities of presenting cheques to the 'Paying Bank' electronically and
to process return cheques in a similar manner.

The CTS is the first project in the world to incorporate all
three components - proof of deposit, settlement, and an eight-year-long archive.
"Physical cheques still account for 80% of all transactions, while
electronic means - including credit cards - accounts for the remainder. Going by
the sheer number of banks in the country, this opens a huge opportunity for us
to explore," said Ajit.

Elaborating on the tie-up with Digital Check Corporation,
Ajit said, "DDC was an obvious choice as it specializes in providing check
scanning equipment to banking and financial markets around the world through a
network of systems integrators, resellers, and solution providers. If you take
just an example, the top 10 banks in the US use about 15,000 units of TellerScan
because of its image quality, price and reliability."

Imation is not the only company to have taken this business seriously. There
are about a dozen other companies providing both hardware and software solutions
in the CTS business. Good CTS can cut the restriction of the current physical
cheque clearance system. Moreover, the system will bring down the high
operational and maintenance costs for banks in the form of staff, couriers,
encoding, passing, signature verification and the security of the physical
instruments to be warehoused after payment.