RBI clarifies ban on alterations/corrections on cheques
The Reserve Bank of India (RBI) clarified that its fresh guidelines with regard to prohibiting alterations and corrections will come into effect from December 1, 2010.
In a clarifications on legal validity and effective date of implementation from the bank and general public, RBI told the banks to educate the customers and create awareness among them to ensure the entire process was carried out in a smooth manner.
It said the prescription on prohibiting alterations / corrections on cheques had been formulated on the basis of recommendations of a working group constituted for examining the need for standardization of cheque forms and enhancement of security features therein and after consultations with banks.
It would also help curtail cheque frauds on account of alterations in the various fields of cheques and to give protection to customers as well as banks and would be applicable only for cheques cleared under the image-based Cheque Truncation System (CTS). Collecting banks should ensure, ab initio, that such cheques are not accepted for presentment in CTS.
It would not be applicable to cheques cleared under other clearing arrangements such as MICR clearing, non-MICR clearing, over the counter collection (for cash payment) or direct collection of cheques outside the Clearing House arrangement.
IndlawNews
UNI
Rajneesh Madhok
