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Five transactions that need your bank account details now

Here are five transactions that need you bank account details:

1. In order to enable direct transfer, it is now mandatory to provide bank details in several transactions with brokers,mutual funds, tax authorities and others.

2. A blank cheque is required to be attached to the documents, to ensure that the account details are correct and the account number and IFSC code can be captured.

3. Do not sign such a blank cheque. Simply cross it across the face, with the words “cancelled” so it cannot be used. Do not endorse such cheques.

4. If your signature has to be verified by the bank manager, provide that as an additional documentation. Most banks have a specific format.

5. If your bank account is held in joint names, it is important that the first holder is also the primary investor in the transaction for which bank details are being provided.

RBI asks banks to be cautious on inoperative account payments

The Reserve Bank has asked banks to exercise caution before making payments to customers claiming funds lying idle in inoperative accounts.

“Banks are advised to invariably verify the genuineness of the transactions and ensure that the amounts paid to the customers are properly audited by the internal auditors / statutory auditors,” RBI said in a communique to banks.

It also asked banks to carry out proper due diligence in accordance with risk category of the customers before making any such payments.

The RBI directive came in the wake of rising cases where banks claimed substantial refunds from the Depositor Education and Awareness Fund, soon after transferring the amounts in the fund.

RBI said it was not clear as to how the customers or claimants, who did not operate the account for ten years or more, approached the banks for repayment immediately after the balances in their inoperative accounts were transferred to the fund.

“Banks should, therefore, follow all instructions meticulously in respect of inoperative accounts,” RBI said.

As per the RBI directive, banks have been advised to carry out special efforts to trace the customers in respect of inoperative accounts.

As per the RBI guidelines, banks are required to pay back the amounts laying in inoperative accounts for ten years or more, along with interest.

They later can lodge a claim for refund from the Depositor Education and Awareness Fund for an equivalent amount paid to the customer/depositor.

Source: Times of India

RBI to Banks: Alert customers in high value cheque payments

To clamp down on cheque-related fraud cases, the Reserve Bank of India (RBI) on Wednesday asked banks to alert account holders by a phone call and contact the base branch in case of non-home cheques before clearing high value payments.

The RBI also asked banks to send an SMS alert to payer/drawer when cheques are received for clearing and examine cheques under UV lamp for clearance beyond Rs 2 lakh.

The central bank further said multi-level checking should be done before clearing cheques above Rs 5 lakh.

“Banks may consider the following preventive measures for dealing with suspicious or large value cheques: Alerting the customer by a phone call and getting the confirmation from the payer/drawer and contacting base branch in case of non-home cheques,” RBI said in a communication to banks.

The RBI said directions have been issued in the wake of a rise in the number of cheque-related fraud cases. It said cases have been reported where even though original cheques were in the custody of account holders cheques in the same series were presented and encashed by fraudsters.

The RBI said banks may resort to given directions selectively, if not feasible to be implemented systematically.

It further asked banks to take appropriate precautionary measures to ensure that the confidential information are neither compromised nor misused either from the bank or from the vendors’ side.

“Due care and secure handling is also to be exercised in the movement of cheques from the time they are tendered over the counters or dropped in the collection boxes by customers.”

Besides, it also asked banks to ensure usage of CTS-2010 compliant cheques, strengthen infrastructure for cheque handling, KYC compliancy, close monitoring of credits and debits in newly opened accounts.

The central bank said such frauds could have been avoided had due diligence been observed at the time of handling or processing of the cheques.

“Banks are, therefore, advised to review and strengthen the controls in the cheque presenting/passing and account monitoring processes and to ensure that all procedural guidelines including preventive measures are followed meticulously by the dealing staff,” RBI said.

Source: Business Today

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