Archive for the 'CTS – 2010' Category

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

Equated Monthly Installments (EMI)

EMI

EMI stands for Equated Monthly Installments.  EMI is monthly basis repayment of the loan amount taken. The loan amount can be home loan, car loan or personal loan that is paid back through a series of monthly payments. EMI is in the form of post dated cheques drawn in favour of lender. They are paid until the total amount due is paid up. If loan amount increases the EMI amount increases too and if time period increases the EMI amount decreases.

How is EMI calculated?

EMI is made up of two variable components- principal amount and interest rate. The EMI is fixed but not the components. The component of interest amount is higher in initial years and decreases over the years. The component of principal amount is lower in initial years and increases over the years.

For this reason, if you consider pre-payment, you should do it in early years as you save on interest rate.

 

Minors over 10 years can operate bank accounts: RBI

RBI has issued guidelines allowing the minors above the age of 10 years to open their bank account independently in view to promote financial inclusion and bring uniformity in opening of such bank accounts.

As per the guidelines, all minors can now open a saving/ fixed/ recurring bank deposit account through either his/ her natural guardians or legally appointed ones.

RBI has also stated that the bank can decide about the limit of the age and the amount upto which the minors would be allowed to operate the accounts independently. Further the bank can also decide on the minimum documents required to open the account.

Banks may or may not offer additional features like Internet Banking, ATM/ Debit card, cheque book facility, etc.

On attaining the majority, the minor is required  to confirm the balance in the account.

If the account was opened by the guardian then on attaining the majority fresh operating account is to be opened along with specimen signature for keeping record for operational purposes.