Cheques, drafts valid for 3 months only
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From April 1, 2012
and bank drafts will be valid only for three months ,
a development that RBI thinks will help mitigate frauds related to such
The Reserve Bank of India (RBI) has directed that with effect
from April 1, 2012, banks should not make payments against cheques,
drafts, pay orders or banker's cheques if
they are presented after the period of three months from date of issue.
It has been brought to its notice by the government that some
persons were taking undue advantage of the six month validity
of cheques, drafts ,
pay orders, banker's cheques by circulating them like cash for this period,
RBI had said in a notification earlier.
According to a senior banker, the three-month validity period
is a good enough time period for instrument conciliation.
It was reported to Central Economic Intelligence Bureau that
some persons are taking undue advantage of the practice of banks of making
payment of cheques or draft presented within a period of six months from the
date of the instrument as these instruments are being circulated in the
market like cash for six months.
"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 had said.