After the recent rise in frauds revolving around cheque related transactions Reserve Bank of India, has made SMS alerts mandatory. Now banks will be sending an SMS alert to both drawer and payer whenever any cheque transaction is processed. It is also compulsory for banks to call customers and get confirmation when dealing with cheque of high value or suspicious information. Until now, it was necessary to alert customers through SMS for all card related transactions but from now on cheque will also fall under the same category. Banks will also scan all cheque that carry a value over two lakhs under ultraviolet lamp to detect tampering additionally any cheque over 5 lakh will go through multiple levels of securitization and examination.
Importance of KYC
Even when cross account money laundering is easy to investigate, many cases of fraudsters using fake accounts for cheque encashment have been reported. The new move aims at making Know Your Customer (KYC) rules stricter and imposing. Many banks are offering customers a chance to open an account without proper KYC documents. It helps scammers to get access to fake accounts then use it for encashment of counterfeited money bonds. The banks will now have to ensure whether a recipient who is drawing a high amount through cheque, has a proper KYC compliant account or not.
Fraudsters to beware
According to the RBI, there have been cases where entire cheque and not just the amount or signature where impersonated. When the original cheque was with the customer, fraudsters managed to encash it. The prospect that something so secure and personal like the serial number can be recreated has left the banks bamboozled and searching for flaws in their security measures. Banks have been asked through the circular to maintain utmost confidentiality when it comes to storing their client’s personal and sensitive information such as name, serial number and contact information.
Diligent and careful staff
Banks will have to pay more attention while handling and processing of cheque. They will also have to keep a close tab over newly opened accounts to determine whether it’s been used for any scam or any such activity. According to the RBI’s circular many of the cases involving forgery of money bills could have been avoided had the staffs appointed in clearing cheque were paying proper attention. Most banks associated cheque disposal and clearing as a minor and unimportant mechanical process that doesn’t require any special attention to detail. Well, all that is about to be changed from now on.
Peace of mind for customers
With a proper system of SMS alerts and validation for forgery in place customers will now be able to find peace of mind. The new move aims at providing security to high-end customers who perform large value transactions. Hopefully, this new regulation will help in bringing down scams related to forged cheque. With proper care and strict implementation of this rules people looking forward to duping banks and others through counterfeited documents will have a hard time in getting away with it.