Monday, March 26, 2012

Cheques, Drafts validity only 3 months from April 1

NEW DELHI, MAR 23: Come April 1 and cheques and bank drafts will be valid only for 3 months, a development that RBI thinks will help mitigate frauds related to such instruments.

The Reserve Bank of India (RBI) has directed that with effect from April 1, 2012, banks should not make payments against cheques, drafts, pay orders or banker’s cheques if they are presented after the period of three months from date of issue.

It has been brought to its notice by the government that some persons were taking undue advantage of the six month validity of cheques, drafts, pay orders, banker’s cheques by circulating them like cash for this period, RBI had said in a notification earlier.According to a senior banker, the three-month validity period is a good enough time period for instrument conciliation.“RBI is satisfied that in public interest and in the interest of the banking policy, it is necessary to reduce the period within which cheques/drafts/pay orders/banker’s cheques are presented for payment from six months to three months from the date of such instrument,” it had said.Source : dtd 23/03/2012

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