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Issuing cheque with alteration may cost you dearly

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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 leaf 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 mailers.

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), UnionBank of India.

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.

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