Know this new rule on the cheques to avoid penalties.

 

New rule on the Cheques.

The new rule on the cheques must be known if you do many transactions through the cheque. The Reserve Bank of India made a significant change in the banking transactions implemented from August 1, 2021. Hereafter you would be very careful before issuing a clearing cheque to anybody. The reason is NACH will be available 24*7 on all days, even on the bank holidays and Sundays.

 

Cheques clear even on holidays.

The availability of NACH all-time results in the clearing of cheques, even on holidays. So, the cheque you issued on Saturday is cleared on Sunday now. Before August 1, 2021, the cheques issued on Saturday will be clear on Monday. The amount maintains on Sunday will not affect the cheque clearing.

Before August 1, 2021: Assume you are running a business and issue a cheque of Rs 100000 for clearing to your supplier on Saturday. If the supplier presents the cheque on Saturday, it clear on Monday. Suppose if you maintain a balance of Rs 50,000 on Sunday will not affect the clearing. The cheque will automatically clear on Monday. If the balance available is more than Rs 1,00,000. Not only on Sundays but also the balance on bank holidays will not affect clearing.

After August 1, 2021: The cheque you issue on Saturday will clear on Sunday due to the availability of NACH all the time. Even though this process is faster, the non-availability of the balance of Sunday may bounce the cheque. Then a penalty for cheque bounces is levied not only for you but also to the supplier.

What is Cheque Clearing?.

It is a transfer of funds from the issuer’s bank account to the Cheque depositor bank account. In 2010, Cheque Truncation System(CTS) replaced the physical movement of cheques to the payee bank. The Reserve bank of India asks the banks to implement CTS in all its branches by September 30, 2021. Recently all banks implemented a positive pay system from Jan 2021, to enhance the safety in CTS. Now another rule is introduced to fasten the clearing process and to increase convenience.

Nowadays NEFT, RTGS, and IMPS are also widely used for fund transfer. But still, there is a preference for cheque clearing because of traditional practice. And the time taken for clearing T+1 day is an advantage for the cheque issuer. T represents the transaction date.