Alternation in Cheques- New RBI Circular

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CA.Rakesh Kataria

291 Points Joined July 2007

Banks have received RBI guidelines by virtue of which they are supposed to prohibit alterations / corrections on the cheque leaf.

Thedetails are a follows :-

RBI Circular - DPSS/CO/CHD/No. 1832/01.07.05/2009-10 dated 22nd February 2010 states that no changes / corrections should be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) or legal amount (amount in words), etc., fresh cheque forms should be used by customers. This would help banks to identify and control fraudulent alterations.

Based on the above guidelines branch / clearing teams can return cheques which have any alteration in the

Payee Name
Amount in numbers
Amount in words

The only alteration which is allowed is the alteration in the date.

Note: · The above change will be incorporated by change in the Terms and Conditions on the cheque book issued by Banks.

· Where available, customers should be informed through a message in the email as well as physical statement in April, May, June quarter

Banks will start returning the cheques for cash payments across the counter and clearing cheques effective 1st July 2010.

regds

CA.Rakesh Kumar

Chandigarh

carakesh_kumar @ yahoo.co.in

Replies (4)

Ashish Sharma

Service

1028 Points Joined March 2009

Thanks for information

Jyoti Malik

ACCOUNTANT

2644 Points Joined December 2008

Thanks

CA.Rakesh Kataria

291 Points Joined July 2007

Additional notes on "Alterations on Cheque-In continutation of earlier mail of Alteration of Cheques

In continuation of the above article, please read below............

Actually, the RBI is rolling out CTS-2010 Standard (Standardisation and Enhancement of Security Features in Cheque Forms), to bring uniformity in cheques issued by individual banks in order to help faster and accurate clearing as also to avoid frauds.

During the period April-December 2009, clearing houses in the country have, on an average, processed around 45 lakh cheques every day. The RBI has initiated several measures to ensure that this system functions in a safe and efficient manner.

The annexure to the RBI circular, RBI/2009-10/323, DPSS.CO.CHD.No. 1832/ 04.07.05 /2009-10 (correct the number) lists 4 items covering16 points of convergence (including a sample layout of a cheque leave); the "alteration on cheque" is just one among them.

Presently, in case of any mistake in writing out a cheque, you can correct it by endorsing the change. This certainly is prone to fraud. The change initiated now is that a cheque must be without any mistakes or corrections. This, to a large extent, can bring the curtain down on fraudulent alterations.

This is a welcome change; no need to be alarmed. If the total change contemplated under CTS-2010 Standard is appreciated, one can not help observing that RBI ought to have initiated this uniformity much earlier.

The revised cheque standard, part of CTS-2010 Standard, is not a mere guideline, but a collective decision of various stakeholders, viz. commercial banks, paper manufacturers, security printers, etc., apart from Reserve Bank of India. RBI is yet to announce the effective date for CTS-2010 Standard.