Prohibiting alterations/ corrections in cheques presented through Cheque Truncation System (CTS)
Reserve Bank of India in order to identify and control fraudulent alterations on cheques has issued guidelines that no changes/ corrections should be carried out on the cheques (other than date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) and legal amount (amount in words) etc., fresh cheques should be used by customers.
The aforesaid provision is applicable only cheques cleared under the image-based Cheque Truncation System (CTS). CTS is presently implemented only in National Capital Region (NCR) and will be introduced shortly in Chennai.
Cheques can be returned irrespective of availability of funds.
Cheques can be returned even if the alterations are authenticated by account holder/s or authorized signatory/ ies.
Alteration in date is allowed and Branches may pass the cheques if authorized signatory/ ies have signed the alteration and the cheque is otherwise in order.
The aforesaid provision is not applicable to cheques cleared under other clearing arrangements such as MICR clearing, Non-MICR Clearing, over the counter collection (for cash payment) or direct collection of cheques outside the Clearing House arrangement.
The provisions will be effective be from December 01, 2010.
Banks are empowered to return the cheques presented in Cheque Truncation System (CTS) which are having alterations/ corrections except for date validation purpose.
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