No overwriting on cheques after December 1: RBI
The RBI directive to banks, asking them not to honour cheques with overwriting, will come into effect from December 1 instead of the earlier scheduled date of July 1, the apex bank said in its latest circular.
Mumbai: The RBI directive to banks, asking
them not to honour cheques with overwriting, will come into
effect from December 1 instead of the earlier scheduled date
of July 1, the apex bank said in its latest circular.
The new rule is intended to prevent fraudulent withdrawal
of money and expedite clearance of cheques.
Meanwhile, telecom company Bharti Airtel subscribers
received an SMS on June 28 that said "as per RBI, cheques with
changes in amount or payee name (despite signature next to
them) will not be cleared with effect from July 1."
However, Airtel today said that it is in the process of
sending a revised advisory to its customers informing them
about the change in the deadline to December 1.
RBI has also advised banks to create awareness among
customers about the new norms, which were aimed at preventing
fraud, besides expediting clearance of cheques where CTS
(Cheque Truncation System) is used. Under CTS, image of cheque
is sent to clearing house for transfer of funds.
When contacted, an RBI spokesperson said, "The
notification regarding cheque truncation system which
prohibits alteration will come into effect from December 1,
2010. There is no mention of July 1."
The central bank in February had come out with circular
on `Standardisation and enhancement of security features in
cheque forms` detailing the norms for image-based processing
RBI had said that fresh cheques should be issued by
customers in case of change in payee`s name or amount
(whether in figures or words). Changes, however, could be made
with regard to date.
The new norms will not apply to those cheques, which are
cleared by clearing houses that use Magnetic Ink Character
Recognition (MICR) or non-MICR system.
Also, it added, the norms will not be mandatory for
over the counter collection of funds or for direct collection
of cheques outside the Clearance House Arrangement.