RBI extends deadline for issuance of new format cheques
All cheques currently with customers in the old format (non-Cheque Truncation System) will continue to be valid for another four months.
Mumbai: The RBI on Monday asked banks to issue new cheque books only under the new format and gave them time till July-end to withdraw the old format cheques. All cheques currently with customers in the old format (non-Cheque Truncation System) will continue to be valid for another four months (the earlier deadline was March 31), the apex bank said.
The Reserve Bank also said the system of post dated cheques and payment via Equated Monthly Installment (EMI), in either the old or new format, will be banned from now wherever electronic debit facilities are available.
"All residual non-CTS-2010 cheques with customers will continue to be valid and accepted in all clearing houses (including the Cheque Truncation System (CTS) centres] for another four months up to July 31, 2013, subject to a review in June 2013," RBI said in a circular to bank heads. It asked them to create awareness about the issue among customers through SMS alerts, letters, display boards in branches/ATMs, log-on message in Internet banking and notification on the website so that the deadline can be met.
"All cheques issued by banks (including DDs/POs) with effect from the date of this circular shall necessarily conform to CTS-2010 standard," the circular said. In December, the RBI had extended the deadline to convert to the new standard CTS-2010 by three months to March 31, based on the representations from stakeholders. Today's circular was issued following consultation from the industry body Indian Banks Association and a few lenders.
The CTS-2010 eliminates the current practice of physically presenting a cheque to the payee bank, thereby substantially reducing the time for cheque clearance.