If you make payments through cheque, then be more careful before issuing a cheque to any person. The Reserve Bank of India (RBI) has made some changes in banking rules that came into effect on August 1. The central bank has decided to make available the facility of bulk clearing round the clock now. From this month, the National Automated Clearing House (NACH) is operational 24 hours a day.
What you should be mindful of the new NACH rules?
Now as NACH is available on all days, you need to be extra careful when making a payment via cheque as it can go for clearing and get encashed even on non-working days and holidays. So, before issuing a cheque, ensure that the bank account has a sufficient balance otherwise the cheque will bounce. If the cheque bounces, you will have to pay a penalty amount.
What is NACH?
NACH, a bulk payment system operated by the National Payments Corporation of India (NPCI) facilitates one-to-many credit transfers such as payment of dividend, interest, salary and pension.
It also facilitates the collection of payments pertaining to electricity, gas, telephone, water, periodic instalments towards loans, investments in mutual funds and insurance premiums.
New payment rule for high-value cheques
In January this year, RBI implemented a ‘Positive Pay’ system to enhance the safety of cheque-based transactions. Under the 'Positive pay system' for cheque re-confirmation of key details may be needed for payments beyond ₹50,000.
Under this process, the issuer of the cheque submits electronically details related to the cheque presented for clearings, such as the cheque number, cheque date, payee name, account number, amount, and other details against a list of cheques previously authorized and issued by the issuer.
