Cheque fraudsters beware! RBI makes it mandatory to send SMS to customers before clearance

the Reserve Bank of India on Friday directed the banks to send an SMS to payer/drawer when cheques are received for clearing.
New Delhi, Nov 7: In a slew of measures to put a restraint over cheque-related fraud cases, the Reserve Bank of India on Friday directed the banks to send an SMS to payer/drawer when cheques are received for clearing.

The Central Bank has also directed the banks to alert the account holder by a phone call, examine the cheques under UV lamp and contact the base branch in case of non-home cheques before clearing high value payments. These are mandatory guidelines for all the banks issued by the RBI.

The central bank further said multi-level checking should be done before clearing cheques above Rs 5 lakh.

"Banks may consider the following preventive measures for dealing with suspicious or large value cheques: Alerting the customer by a phone call and getting the confirmation from the payer/drawer and contacting base branch in case of non-home cheques," RBI said in a communication to banks.

The Reserve Bank of India (RBI) said directions have been issued in the wake of a rise in the number of cheque-related fraud cases. It said cases have been reported where even though original cheques were in the custody of account holders cheques in the same series were presented and encashed by fraudsters.

The RBI said banks may resort to given directions selectively, if not feasible to be implemented systematically.

It further asked banks to take appropriate precautionary measures to ensure that the confidential information are neither compromised nor misused either from the bank or from the vendors' side.

"Due care and secure handling is also to be exercised in the movement of cheques from the time they are tendered over the counters or dropped in the collection boxes by customers."

Besides, it also asked banks to ensure usage of CTS-2010 compliant cheques, strengthen infrastructure for cheque handling, KYC compliancy, close monitoring of credits and debits in newly opened accounts.

The central bank said such frauds could have been avoided had due diligence been observed at the time of handling or processing of the cheques.

"Banks are, therefore, advised to review and strengthen the controls in the cheque presenting/passing and account monitoring processes and to ensure that all procedural guidelines including preventive measures are followed meticulously by the dealing staff," RBI said.

(With inputs from PTI)

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