For improved performance of a predictive coding system used for encoding picture signals at low bit rates, it is necessary to design not only an efficient predictor, but also an efficient quantiser that produces minimum perceptible distortion. We have described in the paper a scheme in which a special quantiser called a ‘centre-clipping quantiser’ (CCQ) is used in a ratio PCM coder. The subjective quality of the picture at 1.58 bit/pel is similar to that of an ADPCM coder at 3 bit/pel, giving an advantage of more than 6 dB in performance.