Minimize number of free cheque books issued to individuals: RBI

The Reserve bank of India (RBI) has recommended in its discussion paper that the number of free cheque books given per year to individuals may be kept to a minimum and instead they should be encouraged to use electronic payments.

As per central bank’s recommendations:

  • Banks may levy moderate or steep charges on cheques issued beyond this minimum number.
  • In case of fresh loans, post-dated cheques (PDCs) should be completely stopped and repayments should be only through electronic payments, with suitable conditions for late payment and non-payments, which should be disclosed upfront.
  • Current PDCs should be converted to electronic payment mandates within a prescribed timeline.
  • Credit card dues should be paid electronically. In case cardholders make payments of dues using cheques, then the issuing banks may levy high convenience charge.
  • Banks may set some amount/value limit for cheques issued by individuals. Such charges may be higher than the charges levied on electronic payments of similar value.
  • Banks may levy a processing charge in case of individuals who have invested in shares/debentures/bonds and have not opted for receiving dividend/interest directly into their bank accounts, deposits the cheque into their bank account for collection.
  • Cheque collection boxes at public places should be discouraged and should be provided only at bank branches.



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