In an attempt to reduce the misuse of Cheques (and sometimes DD’s and Pay Orders), RBI has announced that the validity of these instruments will only be 3 months instead of the current 6 months. This change will come into effect from next financial year (1 April 2012, no joke, seriously). The Reserve Bank has identified that instead of encashing the Cheques immediately, some people are mischievously delaying it and use it as money.
It has also informed banks’ to convey this change to their customers by printing the same on issuing cheque books.
There is another change that RBI has brought forward. Any Cheque above Rs.20000 must only be A/C Payee (crossed cheque). This means that money cannot be withdrawn but can only be deposited in the drawers’ account.
