[AI] Issuing cheque with alteration may cost you dearly

Vicky Singh ask.champs at gmail.com
Fri May 28 01:15:32 EDT 2010

if you have written 'hundered' instead of 'hundred' on a cheque, don't
just strike off the additional 'e' and issue the cheque. Use a fresh
instead, or it could cost you Rs100-550. The Reserve Bank of India (RBI)
has notified banks in a recent circular to not accept cheques that have
corrections or alterations in anything but the date. The measure has been
taken to "help banks identify and control fraudulent alterations". The
banks have started informing customers about the policy change through

If you issue a cheque with corrections, you will be slapped with cheque
return charges that are Rs100-250 for public sector banks and Rs350-550 for
private banks.

"It is consumer protection that the RBI is looking at. Many a times cheques
are stolen and encashed by other parties by making corrections," said S
Govindan, general manager (personal banking and operations), Union Bank of

He said the move is essential keeping in view the changes in the way
cheques are dealt with now. "Earlier, banks used to tell people not to
issue a bearer cheque and about some basic precautions. But now cheques get
couriered. Also, they are deposited in drop boxes. So the possibility of
them falling into the wrong hands is high."

The RBI also wants to reduce and, if possible, eliminate transactions
through cheques. "Now that daily interest rate calculation has come in, it
works in your favour to keep money in your account for as long as possible.
At least three days are wasted in the issuance of a cheque. Whereas
netbanking is instant," said a banker.

 Apr 22, 2010 RBI

RBI  has issued RBI Circular No.  -
DPSS.CO.CHD.No<http://dpss.co.chd.no/>. 1832/01.07.05/2009-10
dated 22nd February 2010 by virtue of which Banks are supposed to prohibit
alterations / corrections on the cheque leaf. Circular summary is as

Prohibiting alterations / corrections on cheques : No changes / corrections
should be carried out on the cheques (other than for date validation
purposes, if required). For any change in the payee's name, courtesy amount
m(amount in figures) or legal amount (amount in words), etc., fresh cheque
fors should be used by customers. This would help banks to identify and
control fraudulent alterations.

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