RBI New Rule- Be Mindful When Issuing Cheque for Payment or Else Bear Penalty
Moneylife Digital Team 10 August 2021
As per the Reserve Bank of India (RBI) rules, National Automated Clearing House (NACH) has been made available on all days from 1 August 2021. Consequently, NACH will be available on all 7 days of the week.
 
This new rule will benefit the cheque book users as their issued cheques will be easily cleared on a holiday. This means that the issued cheques will be cleared on a Saturday or Sunday too.
 
The new rule will further lessen the time and notably, you have to keep a minimum balance in the bank account so that it gets cleared easily. If you process the cheque faster, then there is a high chance that it may get bounced and then you will be liable to pay the penalty of a fine. This is a major overhaul when it comes to banking. 
 
It is important for customers to keep in mind that NACH will be operational all hours of the day and even on holidays. NACH is basically a bulk payment system that is operated by the National Payments Corporation of India (NCPI). It also facilitates several types of transactions such as salaries, pensions, interest, dividends and so on. 
 
On 4th June, the banking regulator had said, "In order to further, enhance customer convenience, and leverage the 24×7 availability of RTGS, NACH which is currently available on bank working days, is proposed to be made available on all days of the week effective from August 1, 2021".
 
NACH is the NPCI's initiative for banks, financial entities, corporates and government for enabling interbank, high-volume, digital transactions that are repetitive as well as periodic in nature. 
 
The system can be used both ways, i.e., for making bulk payments such as dividend, salary, pension etc. as well as for bulk transactions that involve collection of funds against telephone bill, investment in mutual funds, insurance premium, etc. 
 
NACH is a centralised system, launched with an aim to consolidate multiple ECS systems running across the country and provides a framework for the harmonisation of standard and practices without local barriers/inhibitors. 
 
NACH system will provide a national footprint and is expected to cover the entire core banking enabled bank branches spread across the country irrespective of the location of the bank branch.
 
Since now NACH will be available on all days, bank customers need to be extra careful when making a payment via cheque as it can go for clearing and get encashed even on non-working days and holidays. 
 
So, you need to be extra careful and ensure that the bank account has sufficient balance especially when the cheque is being deposited for payment. If the cheque bounces, you will be charged a penalty amount.
Comments
saharaaj
3 months ago
look at at the number of Check bounced cases are pending i the courts and choking the courts a s courts are reluctant to take apt measure
nickymomin7
3 months ago
Well, it is the customer who should be aware of his balance when he presents a cheque. It is also irresponsible of a customer to present a payment but don't keep the balance required.
glnprasad52
3 months ago
Bank can not commit a mistake, and it is treated as gross negligence and the bank is bound to pay compensation for unlawful dishonor of the cheque.
yerramr
3 months ago
If the bank commits a mistake in returning what is the penalty for the bank? File a defamation suit which is costly?
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