Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: form 3cd :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: cpt :: empanelment :: articles on VAT and GST in India :: list of goods taxed at 4% :: TDS :: VAT Audit :: due date for vat payment :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT
 
 
Latest Circulars »
 RBI releases Annual Report of the Banking Ombudsman Scheme
 Issuance of ₹ 500 bank notes without inset letter, in the Mahatma Gandhi (New Series)
 RBI-Exim Bank's GoI supported Line of Credit of USD 35.00 million to the Government of the Republic of Guinea
 RBI-Amendment to Master Direction on Know Your Customer
 Reserve Bank of India Act, 1934 – Section 42(1A) Withdrawal of the Incremental CRR
 RBI-Transcript of Statement made by Shri R. Gandhi, Deputy Governor
 Requirement of customer due diligence and need for maintenance of records
 Card Not Present transactions – Relaxation in Additional Factor of Authentication for payments upto ₹ 2000/- for card network provided authentication solutions
 Auction of Government of India Dated Securities December 05, 2016
 Withdrawal of Legal Tender Character of the old Bank Notes in the denominations of ₹ 500/- and ₹ 1000/- (Updated as on December 05, 2016)
 RBI-Investment under PIS in M/s Laurus Labs Limited by FIIs/FPIs upto 49 per cent and NRIs upto 24 per cent

RBI-Cheque related fraud cases - preventive measures
November, 07th 2014

RBI/2014-15/294
DBS.CFMC.BC.No. 006 /23.04.001/2014-15 

November 5, 2014

The Chairperson / Chief Executive Officers 
All Scheduled Commercial Banks (excluding RRBs) / Local Area Banks

Dear Sir / Madam,

Cheque related fraud cases - preventive measures

The rise in the number of cheque related fraud cases is a matter of serious concern. It is evident that many of such frauds could have been avoided had due diligence been observed at the time of handling and/or processing the cheques and monitoring newly opened accounts. 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/officials. Given below are some of the preventive measures banks may follow in this regard. The list is only indicative.

  1. Ensuring the use of 100% CTS - 2010 compliant cheques.

  2. Strengthening the infrastructure at the cheque handling Service Branches and bestowing special attention on the quality of equipment and personnel posted for CTS based clearing, so that it is not merely a mechanical process.

  3. Ensuring that the beneficiary is KYC compliant so that the bank has recourse to him/her as long as he/she remains a customer of the bank.

  4. Examination under UV lamp for all cheques beyond a threshold of say, Rs.2 lakh.

  5. Checking at multiple levels, of cheques above a threshold of say, Rs. 5 lakh.

  6. Close monitoring of credits and debits in newly opened transaction accounts based on risk categorization.

  7. Sending an SMS alert to payer/drawer when cheques are received in clearing.

The threshold limits mentioned above can be reduced or increased at a later stage with the approval of the Board depending on the volume of cheques handled by the bank or it's risk appetite.

2. In addition to the above, banks may consider the following preventive measures for dealing with suspicious or large value cheques (in relation to an account’s normal level of operations):

a) Alerting the customer by a phone call and getting the confirmation from the payer/drawer.

b) Contacting base branch in case of non-home cheques.

The above may be resorted to selectively if not found feasible to be implemented systematically.

3. It has been reported that in some cases even though the original cheques were in the custody of the customer, cheques with the same series had been presented and encashed by fraudsters. In this connection, banks are advised to take appropriate precautionary measures to ensure that the confidential information viz., customer name / account number / signature, cheque serial numbers and other related information are neither compromised nor misused either from the bank or from the vendors’ (printers, couriers etc.) 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.

Yours faithfully,

(Manoj Sharma)
Chief General Manager

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Reengineering Software Re-engineering Software Reverse Engineering Software Reverse Development Software Change Modulation Software Conversion Software Re-creation Software Re-development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions