You may need to be extra careful while writing cheques in future. Bank regulator Reserve Bank of India (RBI) as well as banks are becoming more strict about individuals issuing cheques. Very often, individuals sign cheques irrespective of the balance in their savings account, to keep away from the creditors. Or, for electronic clearing services or auto debit bill payments or investments, if they do not have sufficient balance.

Insufficient balance
The State Bank of India (SBI) plans to close the savings account if cheques are issued without sufficient funds in the account.

“If four consecutive cheques bounce due to unavailability of funds, we may close your savings account,” confirms a senior SBI official. This move will act as a deterrent for account holders, who will be more careful when transacting through cheques, he adds.

Private sector banks may soon follow suit. “We deal with cheque bounces on a daily basis. This move is necessary to tighten the regime around cheque bounces,” says an official with a private sector bank, which is also likely to implement this norm.

Also, bankers do not favour post-dated cheques, as there is no guarantee of sufficient money in the account to honour the cheque.

Avoid overwriting
The regulation proposed by the apex bank has been diluted substantially. Overwriting will not be allowed for cheques that are being cleared under the image-based cheque truncation system, or CTS.

At present, the issuing bank sends the physical cheque to RBI (and, in some cases, SBI) for clearance. The amount is then credited to the receiving bank’s account in two-three days.

In the image-based mechanism, a photocopy of the cheque will be sent to the clearing house, thereby making the process quicker. The recent circular, issued on June 22, says overwriting on these cheques will not be allowed.

In case of any overwriting while transferring money through this system, banks have been strictly asked to not accept those cheques.

Besides the two measures that are being implemented, there are some general guidelines that you need to follow.

Cross cheques
While issuing a cheque, make sure you cross it as an account-payee cheque. Bankers say customers fail to follow even the basic precautions taken during cheque-related transactions. For instance, 45-year-old Rashid Ali was duped of Rs 2 lakh when he lost a bearer cheque. Importantly, always strike out the word ‘bearer’ from the cheque, because it will mean anyone who has the cheque in hand can get it encashed.
Keep record of transactions
Always write the cheque details, such as the cheque number, amount, date and payee, in the section provided at the beginning of the cheque book. In case of any fraud, this record can be of help.

Bankers encourage customers to seek account statements from the bank and reconcile these with details in their cheque books from time to time. It will help them to ensure that the transaction details match those in the statement.

Do not pre-sign cheques
Already-signed blank cheques can land you in trouble. Bankers say this can be easily avoided by salaried individuals, as most withdrawals take place through automated teller machines or ATMs, and money transfers are not frequent. Significantly, once you have written the amount, ensure there is no space where numbers can be filled in. Use a ‘/-’ sign immediately after the amount.

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