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RBI wakes up to cheque related frauds

In recent times, instances of frauds involving the 'very dependable' cheques have assumed serious proportions. RBI is of the opinion that quite a few of these could have been prevented, had the banks been a bit more vigilant before honouring these cheques.

Therefore, it has now issued a notification to all the banks advising them to ensure that the processes involved in presention and passing of cheques are duly strengthened. Also, the accounts must be actively monitored to make certain that the procedures and preventive measures, as laid down, are diligently implemented and rigorously followed.


An indicative list of these preventive measures, suggested by RBI, are outlined below:

- There should be 100% usage of CTS - 2010 compliant cheques
- The beneficiary should be KYC compliant
- Cheques of say value above Rs.2 lakhs to be examined under ultraviolet lamp
- Cheques of say value above Rs.5 lakhs to be checked at multiple levels
- An SMS alert should be sent to the payer/drawer of the cheque when the same is received in clearing
- Newly opened accounts should be closely monitored 
- Cheque handling and clearing infrastructure to be made more robust and handled by personnel of high calibre.

(Note: The aforesaid minimum limits for cheques requiring detailed examination can be increased or decreased by the banks based on approval from their respective Boards.)

In addition, depending on the feasibility, extra precautions may be necessary for suspicious and large value cheques. For example,
a) contacting the customer through phone and obtaining the confirmation from the payer/drawer
b) for non-home cheques, the base branch may be contacted.

In fact, there have been occasions when the cheques from the same series were presented, even while the customers had the original cheques with them. To reduce such cases of fake cheques, banks have been advised to build appropriate systems such that
i.  The customers' confidential information is not compromised either at the bank itself or even at the printers / couriers etc.  
ii. Even the cheque movement after tendering / depositing at collection boxes should be made more secure.

In this connection, I would suggest that instead of using collection boxes, you must deposit the cheque at a branch. Nowadays this can be done at any branch and not necessarily at your home branch. Moreover, many branches offer extended working hours and weekend banking. So this is not going to be of any great inconvenience.

Some level of proactive precautionary measures from our side too will go a long way in protecting ourselves from frauds.

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