From 1-July-2010 writing cheque with alterations will cost you time and money
Paper-based cheque writing is one of your popular mode for making and receiving payments in our country. Use of cheque by you is widespread and constitutes an important part of your regular payment transactions. Most of the time you write all details, like payee’s name, amount in figures, amount in words and date in your cheque correctly. At times, inadvertently or because of carelessness, you do write incorrect details in your cheque. On realizing your mistake or incorrect details in your cheque, it is a common habit or practice for you to alter or correct your mistake in your cheque and counter sign next to the alteration. The habit or practice of making alterations in your cheque and counter signing will not be acceptable from 1-July-2010 as per new RBI guideline.
RBI (Reserve Bank of India) has been initiating measures from time to time to ensure that your cheque, the retail payment product, functions in a safe and efficient manner. RBI has initiated several changes on 22-Feb-2010 for your cheque processing. One of the initiative which affect you is – “Prohibiting Alterations / Corrections on Cheque” as specified in Section 1.8 of RBI Circular /2009-10/323 DPSS.CO.CHD.No.1832 / 04.07.05 / 2009-10. This new cheque writing guideline is initiated –
* To help banks identity and control fraudulent changes on your cheque
* Part of standardisation (Cheque Truncation System (CTS) CTS-2010) and enhancement of security features in cheque
Cheque Writing New Guideline – Effective from 1 July 2010, prohibiting alterations or changes on your cheque
* For any change in the payee’s name, cheque amount in figures, cheque amount in words, you have to issue a fresh cheque
* Your bank will return / reject your cheque having alteration in -
o Payee’s name
o Amount in figures
o Amount in words
* Only alteration allowed on your cheque will be date change
Impact of New Cheque Writing Guideline – Your cheque writing behaviour needs to change and adapt to the RBI initiative. You have to be careful and give attention while writing your cheque. As a small mistake in your cheque will make your cheque unusable, and liable to rejection by your bank. Writing cheque with alterations will impact you both in terms of time and cost.
* Cost Impact – Increase in your banking cost
o You will have to write a second cheque when you make a mistake in writing your first cheque. So making mistakes in cheque writing will mean using more number of cheque leaves. Using more number of cheques will increase your banking cost. As some bank or some bank account do charge extra fee for providing yuo more number of cheques or chequebooks
o In case you forget to write a new cheque and submit your cheque with alterations, then your bank will reject the cheque having alterations. This will increase your banking cost. As your bank will or can charge cheque bounce charge for rejection of your altered cheque
* Time Impact – Extre time needed to write or get a new cheque. This is a very common every day experience. You are going to make payment, like utility payment, and you are carrying a cheque with anticipated payment amount already written in your cheque. In payment office, you come to know that payment amount is slightly different from the amount already written in your cheque. Previously you being account holder of the cheque, you could have made an alteration and counter signed the cheque. With new RBI guideline, you will have to write a new cheque, which will mean you have to come back to your residence for a new cheque and then re-visit your payment office. So writing a new cheque will involve considerable amount of extra time
We may write our cheque carefully without any alterations
The change some what ok. In india lot of people those who know only read and write still face difficulty while filling forms in banks. It should not be too strict. All are not fine with spellings. for ex some write 'thousand only' some may write 'thousend only' but the pronunciation is same. in such case the check is to be accepted.
I would like to suggest one more thing. All difficulties mostly happens only in India. There is no uniformity in Law, in education, in salary, state rules and bank system also. MNC Banks are simply looting indians with a right to loot under govt licence. If you compare they are not providing any extra facilities more than nationalised banks. In case of cheque bouncing due to insufficient funds, MNCs charging 350/-. All account holders are not fraud. I feel 80% to 90% are genuine. The ATM system make account holders happy and is very very useful. The moment you draw cash from ATM, automatically you got SMS on your mobile. It means so developed our communication/network system.
Finally what I want to suggest in case of insufficient funds to honour a cheque, banks have to send an alert msg by giving 24Hrs time to arrange funds will be a good support of banks for their valuable customers. But I doubt banks will not loose their this one source of income, but RBI has to give guidelines to all Banks. All MNC Banks have to give their service inline with nationalised banks.