Cheque Alteration not allowed from July 1st 2010 | New RBI circular on Cheque effective from 1st of Dec 2010:
The RBI directive to banks, asking them not to honour cheques with overwriting, will come into effect from 1st December instead of the earlier scheduled date of 1st July.
The new rule is intended to prevent fraudulent withdrawal of money and expedite clearance of cheques, the apex bank said in its latest circular.
RBI has advised banks to create awareness among customers about the new norms, which were aimed at preventing fraud, besides expediting clearance of cheques where CTS (Cheque Truncation System) is used.
Under CTS, image of cheque is sent to clearing house for transfer of funds.
Also, it added, the norms will not be mandatory for over the counter collection of funds or for direct collection of cheques outside the Clearance House Arrangement.
The new norms will not apply to those cheques, which are cleared by clearing houses that use Magnetic Ink Character Recognition (MICR) or non-MICR system.