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Friday, December 2, 2011

Do not process over 3-mth old cheques: RBI to urban co-ops

The Reserve Bank of India on Friday directed primary urban cooperative banks not to make payments on cheques and other financial instruments that are over three months old, with effect from April next year.

RBI directs that with effect from April 1, 2012, banks should not make payment of cheques/drafts/pay orders/banker’s cheques bearing that date or any subsequent date if they are presented beyond the period of three months from the date of such instrument,” the Reserve Bank (RBI) said in a circular to all primary urban cooperative banks.

The directive comes a few weeks after the central bank issued similar directions to scheduled commercial banks and regional rural banks stating that such instruments will not be valid if they are over three months old.

“In India, it has been the usual practice among bankers to make payment of only such cheques and drafts as are presented for payment within a period of six months from the date of the instrument,” the circular said.

RBI is satisfied that in public interest and in the interest of the banking policy, it is necessary to reduce the period within which cheques/drafts/pay orders/banker’s cheques are presented for payment from six months to three months from the date of such instrument,” it said.


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