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Tuesday, December 18, 2012

Developments in Banking

1.Validity Period of Cheques. NEW RBI NORMS ! make life smoother for investors.

For years, the validity period of cheques, pay orders and demand drafts or bankers' cheque has been six months. This, however, is changed. Starting April 1 ,2012,  the time period to en cash cheque or DDs has been reduced to three months. In other words, the validity period for these instruments will three months instead of six months.

Validity of cheques: In a diktat issued earlier this month, the Reserve Bank of India said this move was intended to stop the misuse of the six-month validity period by 'some persons' who were circulating such instruments in the market like cash. "The Reserve Bank is satisfied that in public interest and in the interest of 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," the notification said.


Through this measure, the banking regulator seeks to curb the practice of transferring a cheque (and thus, the proceeds of the instrument) from a person in whose favour it was originally issued to another, in return for a fee.

This apart, banks have also been asked to refrain from crediting the proceeds of an 'account payee cheque' to those other than the payee constituent (that is, the one to whom such a cheque is issued).

Source: The Economic Times

2. RBI cautions Public Not to respond to Phishing Mail sent in its Name

A press release from Reserve Bank of India has cautioned the banks and the 
public about a phishing mail purported to have been sent by RBI. Please go 
through the mail and take precautions as advised by RBI.

It has come to the notice of the Reserve Bank of India that an email has been 
sent in its name from mail id: Reserve Bank Of India < no-reply@rbi.com > 
and signed by RBI, Security Team offering a 'new online security protection' 
called  "Netsecured” to “reduce fraud and theft in various banking system
…(and)… to enable all customer's online banking in all Indian Banks to get 
protected and Secured.”

The Reserve Bank cautions members of public that it has not developed any 
such software; nor has it sent any such mail asking online banking customers 
to update their account details to secure their online accounts. In fact, the 
Reserve Bank does not have any mail id with extension @rbi.com

Members of public receiving such mails should not open the attachment and/or 
try to download the attachment on their computers. This is a phishing mail and 
accessing the mail in any manner could result in identity theft.

Press Release : 2012-13/634

3. RBI Extends CTS Cheque Deadline by 3 months:


As you are aware, RBI advised on 03.09.2012 that  all banks to arrange 
to issue only multi-city/payable at par CTS-2010 standard cheques not 
later than September 30, 2012 and to withdraw the non-CTS-2010 
Standard cheques in circulation before December 31, 2012 by creating customer awareness. Further, banks holding post-dated EMI cheques 
(received either on their own behalf or on behalf of their NBFC clients 
and others) were advised to ensure the replacement of non-CTS-2010 
Standard cheques with CTS-2010 standard cheques before 
December 31, 2012.

While most of the banks, it is reported, have confirmed that they are issuing only multi-city/payable at par CTS-2010 standard cheques at present, representations have been received by RBI from various stakeholders requesting for extension of the time beyond December 31, 2012 for withdrawal / replacement of non-CTS-2010 Standard cheques / post-dated EMI cheques with CTS-2010 standard cheques.

Taking into consideration these representations, it has been decided by the RBI to extend the time up to March 31, 2013 for banks to ensure withdrawal of non-CTS 2010 Standard cheques and replace them with CTS-2010 Standard cheques. 

However, it has been emphasised  that the residual non-CTS-2010 Standard cheques that get presented in the clearing system beyond this extended period will continue to be accepted for the clearing but will be cleared at less frequent intervals

The modalities, charges applicable if any, etc. are being discussed with stakeholders and a separate communication is likely to be issued by RBI  in this regard.

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