Traditional services which people are accustomed to in banking sector now take a new form and shape. In view of customer satisfaction in the banking services yet another system is going to come into existence from 1st April 2013 is Cheque Truncation System(CTS) or Image-based Clearing System (ICS) in India. In good old days ie traditionally, customer deposited cheque used to be presented by the collecting bank to the paying bank over the counter of the latter and collect the amount due from each bank. Over crowding of cheque community, system of meeting in central place where net settlement was made which is Clearing House. Number of clearing houses were set up in different countries was made in manual operations. Due substantial increase in number of cheques, banks introduce MICR(Magnetic Ink Character Recognition format for easy sorting of cheques which are machine readable codes which considerably helped in speeding up clearing process even then physical delivery of cheques still exists. Now CTS essentially means that instead of sending the cheque in physical form by the collecting bank to the paying bank, an electronic image of the cheque is transmitted to the drawee branch for payment through the clearing house, thereby eliminating the cumbersome physical presentation of the cheque to the paying bank, thus saving in time and costs involved in traditional clearing system. This article envisages deep insight into the Introduction, overview of clearing procedure under new environment, procedures, legal status, mandatory features of new