By the end of the year, you may well average out with a request for an extra cheque book altogether, from your bank.
Getting any clue from the above statement? Read on…
If you’re one of those hasty scribblers on an all-important document of your cheque book, here is alerting news for you. According to a new RBI notification to be effective from July 1, 2010, no cheque leafs marked with correction or alteration should be entertained by the banks, except in cases involving validation of the date purposes on the cheque.
This new RBI directive would essentially imply that banks should not to accept cheques from their customers which entail overwriting for the purposes of validation of the changes in the payee’s name and any change in the amount – both numeric and words.
Cheques with counter-sign validation of information by the customer, apart from the one involved in date validation, should be dishonored by the bank. In case of cancellation, the customer will have to issue a new cheque leaf altogether, in order to reduce chances of fraud.
RBI further points out that currently, on an average, as many as 4.5 million cheques are processed by the clearing houses in the country. Hence, such a step involving safety and efficient working of the retail payment product functions is necessary.
The notification also makes it mandatory for the banks to pre-print the customer’s account number on the cheque leafs, so as to avoid risks and misunderstandings involved with wring input of account number on the cheque leaf by the customer.
The RBI has also prescribed certain benchmarks towards achieving standardization of cheques issued by banks across the country such as provision of mandatory minimum security measures on cheque forms and standardization of field placement on cheques.
Key Directives by the RBI:
- No alteration on Cheque leaf except for the date validation purposes.
- Pre-Print of Account number of the customer.
- Pantograph with hidden / embedded ‘COPY’ or ‘VOID’ feature shall be included in the cheques; to act as a deterrent against colour photocopy.
- Watermark with ‘CTS-INDIA’ logo on the cheque leaf with UV features; to make it difficult to photocopy or print an instrument.
- Field placement of a cheque to enable data capturing by Optical / Image Character Recognition engines and automation of payment processes.
Do you feel that this change is for the good of people? Or will it increase the hassles, as the only form of validating mistakes would be issuing a new cheque leaf altogether?
Get complete cheque standardization directive here.