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Moneylife » Newsviewer » Other News » RBI says new norms applicable to cheque truncation system only

RBI says new norms applicable to cheque truncation system only

Moneylife Digital Team | 23/06/2010 06:16 PM | 

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The RBI has clarified that its directive on prohibiting alterations or corrections on cheques is applicable only to cheques cleared under the image-based cheque truncation system

The Reserve Bank of India (RBI) has clarified that its new norms related with alterations or corrections on cheques will be applicable only for cheques cleared under the image-based cheque truncation system (CTS). This will be applicable from 1 December 2010, the RBI said.

In a circular, the central bank said its prescription on prohibiting alterations or corrections on cheques is not applicable to cheques cleared under other clearing arrangements such as magnetic ink character recognition (MICR) clearing, non-MICR clearing, over-the-counter collection (for cash payment) or direct collection of cheques outside the clearing house arrangement.

According to a senior RBI official, it is true that 90% of cheque frauds involve beneficiary changes. A presenting bank has to be 100% sure that it is presenting a bonafide cheque and if it is not satisfied it may not present the same, he added.

The clarification from the central bank will give respite to a majority of bank customers who use the MICR clearing system and save them from the embarrassment of a cheque being returned.
 


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1 Comment
Shantilal Hajeri

Shantilal Hajeri 4 years ago

It is better to have a uniform policy regarding the overwriting of cheques.
At the time of issueing the cheque the drawer may not know whether the cheque is going to be presented through micr clearing or cheque truncation. More over the provisions of Negoitatiable instrument act can not be discriminatory. The provisions regarding material alteration are covered under negotiable instrument act. The proposed policy of the RBI may need amendment to NI Act.

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