New Cheque Validity Period in India

Payment of Cheques/ Drafts/ Pay Orders/ Banker’s Cheques: The existing validity period of 6 (six) months of cheques etc. [if not otherwise mentioned on the instrument] has been reduced by the Reserve bank of India to 3 (three) months from the date of the instrument, which will be effective on and from April 1, 2012.

In a notification of RBI - "...in exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949, Reserve Bank hereby directs 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."

The Negotiable Instruments Act, 1881...

Section 138(a) of the Act provides that - The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.

In view of the aforesaid notification of RBI, in and from April, 2012 "within a period of six months" shall have no implication, only the second part "within the period of its validity" shall be applicable. The validity period is as aforesaid of three months from the date on which it is drawn.

No comments:

Post a Comment

Post a Comment

Related Posts Plugin for WordPress, Blogger...