Cheques containing fractions of Re not
be rejected: Reserve Bank of India
If your bank has been refusing to accept cheques for amounts
that include fraction of a rupee, it’s against the rules and the bank should be penalised.
In an internal
circular issued earlier, the Reserve Bank of India (RBI) had warned that banks
which refuse to accept cheques on such grounds from customers will be sternly
dealt with.
According to an RBI
circular issued in March 2007 (RBI.No.2006-2007/299), banks were advised that
cheques issued by clients containing fractions of a rupee should not be
rejected or dishonoured.
The RBI circular was
issued by chief general manager, P Vijaya Bhaskar. It referred to a High Court
ruling of February 2007 in which Justice RS Garg had said: “The RBI is hereby
directed to issue fresh notifications/notices to all the banks, who have issued
internal circulars, not to receive such cheques, etc. and see that stern action
is taken against the persons who refuse to receive the cheques/drafts which are
in fragments.”
Justice Garg further
said in his order: “No Bank can say that it would not receive one rupee note or
five rupees notes. A bank is a banker on whom the customer banks upon. A bank
cannot say that it would receive only big notes and rest is to be circulated in
the market. If a customer goes to the bank and says that he wants to deposit a
sum of Rs. 1 Lakh in five-rupee notes, the bank, the clerk, the cashier cannot
say that they would not receive it.”
On ‘Interest Rates on
Deposits’, banks were advised that all transactions, including payment of
interest on deposits/charging of interest on advances, should be rounded off to
the nearest rupee; i.e., fractions of 50 paise and above shall be rounded off
to the next higher rupee and fraction of less than 50 paise shall be ignored.
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