BY CA MANOJ KOHLI 8TH NOV.,2011 RBI has trimmed down the extent of validity of cheques as well as drafts to three months as against 6 months earlier.
In a notice, the central bank stated that from 1 st of April 2012, clients will have to present the cheque and drafts for cash payment in a period of 3 months.
In its release, the central banking institution stated that it has been brought to its notice by the administration that a few individuals were taking unnecessary advantage of the six month legality of cheques, drafts, pay orders or banker’s cheques by circling them like cash for this time.
For client alertness, banking institutions have been asked to print the change on cheques and drafts, which will be released from April 1, 2012.
The bank also asked banking institutions to make sure that account payee cheques and drafts are only credited to accounts of the individual identified in the cheque or draft.