image

˜At par™ cheque facility extended to Cooperative Banks/RRBs by Scheduled Commercial Banks

RBI/2013-14/344
RPCD.CO.RRB.RCB.BC.No. Cir.No. 48/07.51.010//2013-14

October 29, 2013

The Chairman
All Regional Rural Banks (RRBs)
All State and Central Co-operative Banks (StCBs and CCBs)

Dear Sir,

Know Your Customer (KYC)/Anti Money Laundering (AML) Standards/Combating Financing of Terrorism (CFT)/ Obligation of banks under Prevention of Money Laundering Act (PMLA), 2002 ˜At par™ cheque facility extended to Cooperative Banks / Regional Rural Banks by Scheduled Commercial Banks

It has been observed that some banks are utilizing ˜at par™ cheque facility extended by Scheduled Commercial Banks not only for their own use but also for their customers, including walk-in customers for facilitating their remittances and payments.

2. Keeping in view the systemic and supervisory concerns that emanate from such an arrangement, RRBs/StCBs/CCBs are advised to utilize the ˜at par™ cheque facility only for:

i) their own use,

ii) their account holders who are KYC compliant provided that all transactions of `50,000.00 or more should be strictly by debit to the customer™s account,

iii) walk-in customers against cash for less than `50,000.00 per individual.

3. In order to utilise the ˜at par™ cheque facility in the above manner, RRBs/ StCBs/ CCBs should maintain

i) records pertaining to issuance of ˜at par™ cheques covering inter alia applicant™s name and account number, beneficiary™s details and date of issuance of the ˜at par™ cheque.

ii) sufficient balances/drawing arrangements with the commercial bank extending such facility for purpose of honouring such instruments.

RRBs/StCBs/CCBs should also ensure that all ˜at par™ cheques issued by them are crossed ˜account payee™ irrespective of the amount involved.

4. RRBs/StCBs/CCBs are advised to make use of more efficient means of remittances for the customers like NEFT or RTGS by providing such services directly or by becoming sub-members of banks providing such services as per regulations in this regard issued by RBI from time to time.

Yours faithfully,

(A.G. Ray)
General Manager

Tags: BankchequeIndian Settlement SystemsKnow Your CustomerModern Language Associationmoney launderingPrevention of Money Laundering Act 2002Regional Rural Bank

profile image

About eMinds Legal

eMinds Legal

eMinds Legal is a Corporate Law Firm based in Gurgaon, India specializing in Corporate Legal, Corporate Secretarial and Compliance. The Firm comprises of a team of Corporate Lawyers and Company Secretaries with in-depth subject matter knowledge and participative industry experience of over 15 years.

Corporate Law Referencer

Recent Articles

Recent Legal updates

Recent Gst Updates