Cheques, Drafts Validity Reduced from 6 months to 3 months from 1st April 2012 onwards
As per RBI Notification, 1st April 2012 onwards the vailidty of Cheques/Demand Draft/Pay orders will be reduced from 6 months to 3 months. It will be valid only for the 3 months from the date of issuance.
This this regulatory change in banking practice due to misuse by some persons taking advantage of of six month validity cheques, drafts, pay orders, banker’s cheques by circulating them like cash for this period, RBI had said in a notification earlier.
It was reported to Central Economic Intelligence Bureau that some persons are taking undue advantage of the practice of banks of making payment of cheques or draft presented within a period of six months from the date of the instrument as these instruments are being circulated in the market like cash for six months.
To control this measure RBI had reduced the validity of those instruments from 6 months to 3 months.
RBI Notification for Cheques/Drafts/PO Vaildity Reduction to 3 months
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