Cheque Truncation System and Opportunity Cost


What is Cheque Truncation System ?
Cheque Truncation System (CTS) is a process of clearing cheques electronically rather than processing the physical cheque by the presenting bank en-route to the paying bank branch. It is a step undertaken by the Reserve Bank of India (RBI) for quicker cheque clearance.
Since there is no physical movement of cheques under CTS, the cost of collection of cheques comes down. Moreover, logistics-related issues are removed and loss of cheque in transit is no longer a problem. This brings down operational risk and risks associated with paper clearing and increases operational efficiency.



What is a Opportunity Cost ?
How many times have you purchased something in a shop, only to later return home and find the cost was lower if you were to purchase online? It can be frustrating - but most of the time, you’re still happy to have purchased the item you wanted. 
In a similar vein but on a much more lucrative and higher scale, opportunity cost refers to the possible benefits an individual, investor or business misses out on when they choose to buy or sell an alternative over another.
In economics - and pretty much any financial decision we make in life - it can be easy to miss or overlook opportunity costs, usually because our energies are focused on the purchasing decision.
But, understanding the potential missed opportunities when a business or investor chooses one over another allows for better decision-making. Instead, they can take a step back, properly evaluate opportunity costs and benefits against the others, leading individuals and organisations to make more profitable decisions.

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