Validity of Cheque / Draft Only 3 Months from 01-Apr-2012

November 9, 2011
1 min read

In India, it has been the usual practice among bankers to make payment of only such cheques and drafts as are presented for payment within a period of six months from the date of the instrument.

RBI has taken cognizance that some persons are taking undue advantage of the said practice as these instruments are being circulated in the market like cash for six months. To plug this loophole, RBI has issued a Circular No. DBOD.AML BC.NO.47/14.01.001/2011-12, dtd. 4-Nov-2011 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.

RBI has directed Banks that w.e.f. 1-Apr-2012, banks should not make payment of cheques/ drafts/ pay orders/ banker’s cheques if they are presented beyond the period of three months from the date of such instrument.

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