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Existing cheque clearing arrangement will continue till year end

Existing cheque clearing arrangement will continue till year end

Good news for those having non CTS cheques left for clearing. RBI has declared that the existing cheque clearing system will continue till year end. Non-CTS-2010 cheques (Cheque Truncation System) will continue to be cleared even after the deadline of July 31, 2013. However,banks must continue to make efforts to withdraw the non-CTS-2010 standard cheques in circulation, said the Reserve Bank of India, in a notification issued on Tuesday.

The deadline for the withdrawal of non-CTS-2010 standard cheques is July 31, 2013 and banks have begun to issue fresh cheques in the CTS-2010 complaint format. But there is still a large volume of non-CTS-2010 format cheques being presented in image-based clearing. Hence, the existing clearing arrangements will continue till December 31, 2013.

New clearing arrangements will be put into effect with effect from January 1, 2014,  in the three CTS centers – Mumbai, Chennai and New Delhi – for clearing of non-CTS 2010 instruments. This separate clearing session will initially operate thrice a week (Monday, Wednesday and Friday), up to April 30, 2014.

Thereafter, the frequency of such separate sessions will be reduced to twice a week up to October 31, 2014 (Monday and Friday) and further to weekly once (Monday). If the day for clearing non-CTS-2010 instruments falls on a holiday, then these cheques will be presented on the previous working day. RBI further told that the operational instructions in this regard will be issued separately by the CTS centers.

Cheques containing fractions of Re not be rejected

Cheques containing fractions of Re not be rejected: Reserve Bank of India

If your bank has been refusing to accept cheques for amounts that include fraction of a rupee, it’s against the rules and the bank should be penalized.

In an internal circular issued earlier, the Reserve Bank of India (RBI) had warned that banks which refuse to accept cheques on such grounds from customers will be sternly dealt with.

According to an RBI circular issued in March 2007 (RBI.No.2006-2007/299), banks were advised that cheques issued by clients containing fractions of a rupee should not be rejected or dishonoured.

The RBI circular was issued by chief general manager, P Vijaya Bhaskar. It referred to a High Court ruling of February 2007 in which Justice RS Garg had said: “The RBI is hereby directed to issue fresh notifications/notices to all the banks, who have issued internal circulars, not to receive such cheques, etc. and see that stern action is taken against the persons who refuse to receive the cheques/drafts which are in fragments.”

Justice Garg further said in his order: “No Bank can say that it would not receive one rupee note or five rupees notes. A bank is a banker on whom the customer banks upon. A bank cannot say that it would receive only big notes and rest is to be circulated in the market. If a customer goes to the bank and says that he wants to deposit a sum of Rs. 1 Lakh in five-rupee notes, the bank, the clerk, the cashier cannot say that they would not receive it.”

On ‘Interest Rates on Deposits’, banks were advised that all transactions, including payment of interest on deposits/charging of interest on advances, should be rounded off to the nearest rupee; i.e., fractions of 50 paise and above shall be rounded off to the next higher rupee and fraction of less than 50 paise shall be ignored.