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Sunday, February 3, 2013

Banks will minimise the number of free cheques


Reserve bank of India has issued a discussion paper in which it has suggested banks to minimize the number of free cheque books to the customers. RBI wants more and more transactions to be done online and this is also a part of it.
Banks offer some cheque books free depending upon the customer account as well as history. After that banks charge for the cheque book on different slabs.
Generally banks offer 20-50 cheque leaf free to the saving account customer either on quarterly or annual basis and after that the charges may be 2-5 Rs. per leaf to the saving account customer.
For the current account holder customers, most banks do not provide any free cheque books and the charges for the cheques may be 3-5 per leaf.
The discussion paper also mentioned about post-dated cheques. Generally one need to give the company post-dated cheques for applying for a loan. The discussion paper suggests that this should be stopped immediately and for this electronic payment should come with suitable conditions for late payment and non-payments, which should be disclosed upfront.
The existing postdated cheques should be converted to electronic payment mandates with in a prescribed time.
The discussion paper also suggested that the credit cards payments should be through electronic mode and the banks may levy charges for the payment of credit card through cheques mode. Banks charge for the cash repayment for credit card and the discussion paper suggest this can be also on cheque mode too.
The discussion paper of RBI also suggest for the limit of cheque which should be mentioned on cheque as the maximum limit of the cheque is this. This also reduces the number of cheque transactions. For any transactions which are above the value of cheques banks can levy charges at the time of sending cheque in clearing. These charges may be above the value of electronic transactions charges or be the same.
Processing charges may be levied to the customers who have not opted for the electronic payment investing in shares, bonds or debentures. There are many transactions such as refund, interest and dividends payments in this type of investment. RBI wants to minimize the use of cheque and maximize the use of e-payment for banking.
 The discussion paper also suggested to increase the charges for both cash deposit and cash withdrawal above the limit. However this thing needs a long discussion and groundwork before implementing.
It also suggest of minimize the cheque drop box and the cheque drop box should only be in the banks and not in the public places such as ATMs.