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 Cheque Truncation System is used
The Reserve Bank of India (RBI) directive to banks, asking them not to honour cheques with overwriting, will come into effect from 1st December instead of the earlier scheduled date of 1st July, the apex bank said in its latest circular, reports PTI.
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 28th June 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 1st July."
However, Airtel said that it is in the process of sending a revised advisory to its customers informing them about the change in the deadline to 1st December.
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 1 December 1, 2010. There is no mention of 1st July."
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 of cheques.
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.
The central bank had earlier asked the banks to be judicious in extending finance to MFs and grant loans and advances to them only to meet their temporary liquidity needs for the purpose of repurchase or redemption
The Reserve Bank of India (RBI) has given one more month to banks to meet the new mutual fund (MF) funding norms which aim at tightening the lenders' exposure to mutual funds, reports PTI.
As per the new norms, the banks' exposure to MFs would be treated as part of their capital markets exposure. Further, the new norms cap banks' overall exposure to equity-linked MFs and other direct advances to acquire securities and investment in venture capital funds, at 20% of their total networth as on the end of the previous fiscal.
"On a review, it has been decided to further extend the transition period by one more month up to 31 July, 2010," the RBI said in a notification on Wednesday. Earlier, the banks had been asked to comply with the guidelines by 30th June.
The central bank had earlier asked the banks to be judicious in extending finance to MFs and grant loans and advances to them only to meet their temporary liquidity needs for the purpose of repurchase or redemption.