Period for Payment of Cheques Reduced from 6 months to 3 Months

The Reserve Bank of India vide a notification dated November 4^th  2011, has  decided to reduce the period within which cheques/drafts/pay orders/banker’s cheques are presented for payment from six months to three months from the date of such instrument.

RBI has stated that such a decision is because some persons are taking undue advantage of the said practice of banks of making payment of cheques/drafts/pay orders/banker’s cheques 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.

In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949, Reserve Bank has directed all the Banks that with effect from April 1, 2012, banks should not make payment of cheques/drafts/pay orders/banker’s cheques bearing that date or any subsequent date, if they are presented beyond the period of three months from the date of such instrument.

Click here to view the Notification.