Tuesday, March 19, 2013

No EMI/Post dated cheque to be asked by Banks , Non CTS cheques valid till 31.07.2013:RBI


on Tuesday, March 19, 2013

RBI in his new instruction (dated 18.03.2013 )has directed all banks not to ask for EMI( equal monthly installments ) PDC's(Post dated cheques from the customers either CTS cheques (read more about CTS 2010 cheque system) or Non CTS cheques ,where ECS(electronic clearing system/RCES(Debit ) facility is available. Further banks has been directed to take a mandate from the customer (borrower) to direct debit his account for equal monthly installments .

So, if you are taking loans from the Bank then no need to issue post dated cheques to bank ,if ECS/RCES(debit) facility is available in your Bank/Branch/Station

This direction will reduce number  of cheques transaction is Banks.

Further RBI has Extended the date for use of Non-CTS Cheques(read more about CTS 2010 cheque system) by the customers up to 31.07.2013 which can also be extended further on review before 30.06.2013 .Complete instructions are given here under.

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Standardization and Enhancement of Security Features in Cheque Forms/Migrating to CTS 2010 standards

A reference is invited to our circular DPSS.CO.CHD.No. 955/04.07.05/2012-13 dated December 14, 2012. On a review of the progress made by banks so far in migration to CTS-2010 standard cheques and in consultation with a few banks and Indian Banks Association, it has been decided to put in place the following arrangements for clearing of residual non-CTS-2010 standard cheques beyond the cutoff date of March 31, 2013.

Non CTS 2010 cheques valid up to 31.07.2013
  1. All cheques issued by banks (including DDs / POs issued by banks) with effect from the date of this circular shall necessarily conform to CTS-2010 standard.
  2. Banks shall not charge their savings bank account customers for issuance of CTS-2010 standard cheques when they are issued for the first time. However, banks may continue to follow their existing policy regarding cheque book issuance for additional issuance of cheques, in adherence to their accepted Fair Practices Code.
  3. 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) centers] for another four months up to July 31, 2013, subject to a review in June 2013.
  4. Cheque issuing banks shall make all efforts to withdraw the non-CTS-2010 Standard cheques in circulation before the extended timeline of July 31, 2013 by creating awareness among customers through SMS alerts, letters, display boards in branches/ATMs, log-on message in internet banking, notification on the web-site etc.
  5. A progress report in this regard to be submitted to this department in the format prescribed in the annex, enabling monitoring of the progress made by banks in respect of migration to CTS-2010 standard cheques.
  6. In addition, the bank-wise volume of inward clearing instruments processed in the Cheque Processing Centers will be monitored with respect to the CTS-2010 / non-CTS-2010 standard cheques presented on them.
  7. No fresh Post Dated Cheques (PDC)/Equated Monthly Installment (EMI) cheques (either in old format or new CTS-2010 format) shall be accepted by lending banks in locations where the facility of ECS/RECS (Debit) is available. Lending banks shall make all efforts to convert existing PDCs in such locations into ECS/RECS (Debit) by obtaining fresh mandates from the borrowers.

2. The above instructions are issued under section 18 of the Payment and Settlement Systems Act 2007 (Act 51 of 2007).

3. Please acknowledge receipt and confirm compliance.

Yours faithfully,

(Vijay Chugh)
Chief General Manager
(read more about what is CTS 2010 cheque system, and how it works.)

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