04 July 2010

IndianCAs: Cheques with corrections to be cleared till Dec 1



Cheques with corrections to be cleared till Dec 1

Parnika Sokhi. Mumbai

Don't be fooled if a bank tells you it cannot clear cheques with cancellations from Today. The Reserve Bank of India (RBI) has clarified that customers need to comply with its guidelines for standardisation of cheques from December 1 and not July 1 as proclaimed by some banks.

The guidelines issued by the RBI in February had specified cheques with cancellations or corrections won't be cleared. The RBI said in a notification last week that these guidelines are applicable only where the Cheque Truncation System (CTS) is in place.

Under the CTS, the cheque's image is sent for verification instead of the original bill. This ensures faster processing compared to the three days it takes for clearance. Therefore, cheques with errors cannot be processed under the CTS. At present, only the Delhi NCR region has implemented the CTS on a pilot basis. Chennai will implement it by the year-end, also on a pilot basis.

The RBI guidelines are not applicable to cheques cleared under other systems like the 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. The RBI said the guidelines have been introduced to curtail frauds due to alterations and to protect banks and customers.

(Source: DNA)

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