RBI is the central bank in India which has the utmost responsibility of making the Indian banking system more strong and modern with the latest technological trend. One of the technological advancement is the electronic payments of amount which is more convenient for the customers and it eliminates the unnecessary paper work and human intervention. The next move by RBS is to eliminate the number of offline transactions through cheque books and encourage banks to reduce the number of cheque books issued to the customers for free of cost. The following are the few points which is taken from the RBI’s recommendation report.
- Cheque Truncation System or CTS from April 1, 2013
- Types of Cheques
- Local Cheque Clearance on Same Day
- RBI suggests banks to issue the minimum number of free cheque books to the customers. The number of cheque books issued is vary for each bank. Few banks not offering any free cheque books after the account opening. After the free cheque books, the charges levied for getting the additional cheque books would be expensive compare to the current situation. Normally banks charge Rs. 2-3 per a cheque leaf.
- In most banks, current account holding customers are not given any free cheque books.
- If there is a fresh loans, repaying the loans using the post dated cheque (PDCs) will be stopped and all the repayments would happen through the electronic payments. Existing PDCs should be converted to the electronic payment within a prescribed timeline.
- Another important point is making the credit card payments should be through electronic. If a customer wants to pay his credit card bill through cheque book, there should be a high conversion fees.
- Also RBI suggests that there should be a maximum amount limit for the cheques issued by an Individual.
- If you are having the shares, while receiving the dividend then the amount has to be sent through the electronic route instead of sending the cheques to the share holder. If he deposits that cheque, the conversion of the cheque will be costly.
- Last but not least, the cheque collection boxes should be only at bank branches. The number of collection boxes will be reduced.
The above points clearly shows that RBI is very keen on making the electronic way of doing transaction across country. But, it is not very clear what is the impact on the rural areas. before making this implementation, RBI has to enforce banks to educate their customers to do the online transactions. The awareness is very low and that should be the highest priority. Otherwise, urban areas this move is very good and it reduces the crowd in bank branches. I hops this information would be useful for you. If you are interested in receiving the future articles, please subscribe here.