RBI’s new Circular to make customer more careful in issuing cheques
Reserve Bank of India has come up with a new circular which if implemented would force the customer to be more observant while issuing a cheque. The new circular states that the bank has full liberty to return a cheque if it bears any form of correction other than that in the date.
This means that any change in the amount, both numeric and words or change in the name of the payee would lead to the cheque being returned by the bank. The directive has been formulated as a measure by the RBI to prevent fraudulent activities which have become highly prevalent in the system.
HDFC Bank is in the process to implement the circular in its terms and conditions laid for cheque books.
Not all banks are in sink with the directive. “Frauds do not only happen because of cheque alterations. This is only one modus operandi. Some people change the cheque’s page name; remove account payee and amount etc. Some people also print fake cheques. This one circular is not going to reduce such fraud cases,” said Ramavatar Singh, general manager, Bank of India.
“No changes/corrections should be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) or legal amount (amount in words), etc., freshcheque forms should be used by customers,” the circular states.
Although the standard format of writing a cheque refrains people to make any kind of alterations in the cheque but mostly banks clear cheques ignoring minor changes.
“There is no rule as such. If one or two corrections are made and if it is countersigned then the cheque can be cleared,” said an official from a private bank.
“As of now we have not fixed any date for implementation of this circular. Somebody who is in a state of readiness can implement it. It is for the benefit of the customers,” a RBI official said.
