RBI reduced DD & Cheque validity limit to 3 months

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RBI has decided to reduce the validity limit of cheque, DD, pay order and banker’s cheque to three months instead of the earlier six month duration and it will be implemented from April 1, 2012.

This step is being taken to reduce the misuse of these financial instruments. Now the customer has to deposit the DDs or cheques for the disbursement of cash within three months of its issue date. Also the demand drafts of above Rs. 20,000 will be account payee only.


RBI explained that this step is taken as people are tend to take disproportionate advantage of longer duration validity of these financial instruments by using them as a cash option in the market.

RBI has asked the banks to do the required changes in their DD and cheque book which will be issued after April1, 2012.

This step seems a good one taken by RBI to stop the misuse of these financial instruments in the market.



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