AK G INSTITUTE OF DISTANCE LEARNING ceo nS a es Soop age amall conn, war anion Ta srs tte atc [A K GUPTA BANKERS TRAINING INSTITUTE ie (77, Block BG-1, Paschim Vihar, New Dethi~ 110063) a“ ele: 09350476949 011 25274157 BANKING LAW & PRACTICE - 4 TOPIC PAGE No. NIACT : : 11027 * BANKING REG. ACT & RBI ACT 2 287033 AKG INSTITUTE OF DISTANCE LEARNING Website: www.bankerstraininginstitute.com email: akg.bti@gmail.com code: 02021120 COPYRIGHT MATE! iG Institute of Distance ANY Scanning, photography, nee or distribution of this material is a "3 Legal Offence under Indian Copyrights Act and IT Act and is liable for Legal Action. AK G INSTITUTE OF DISTANCE LEARNING 2 flt#09350476949; aka.bti@amail.com; www. ‘bankerstraininginstitute.com) ‘PPT HATELY Surg sco tp ee tte er en eC I a abe,AK G INSTITUTE OF DISTANCE LEARNING (M:0935047694: il.com; www.bankerstraininginstitute.com) [oPrnsce MAFIA 8 Senin plan or Php dient He mts oy tec under Idan Cyt tee et en la fr el eon. NEGOTIABLE INSTRUMENTS ACT Definitions 1. Provisions relating to Negotiable Instruments are given in the Negotiable Instruments Act, 1881, The Negoliable Instruments Act is applicable in whole of India including Jammu & Kashmir. The Act came into force w.e.f. Mar 01, 1882. Latest amendment was in Dec 2002. Tolal sections In N | Act are 148, 2. Whet is_a Negotiable Instument?: As per Section 13 of the N | Act, NI means and include promissory note (PN), bill of exchange (BoE) and cheque. 3. Negotiable Instruments as per N | Act: Promissory Note, Bill of Exchange, Cheque, DD 4, Neaoliable Instruments as per Section 137 of Transfer of Property Act: Documents of tlle to goods such as Railway Receipl, Bil of Lading, Warehouse Receipt etc. 5. Negotiable Instruments as per practice and usage: Treasury Bills, Cerlficale of Deposit, Commercial Paper, ‘Govt. Promissory Note. 6. Gealures of Negotiable Instrument: (i) itis freely transferable and (i) the title of the transferee will be better than the transferor if the transferee took the instrument for value and in good faith under circumstances when he did not have suspicion about any defect in the file of the transferor. Such a transferee is called holder in due course and is defined in Section 9 of the Act. 7. Promissory Note: defined in Section 4 of NI Act. Itis an instrument in writing (not being a bank note or a Currency note) centaining an unconditional undertaking signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or the bearer of the instrument. There are two parties in a PN i.e, promisor and promises, or maker and payee. Currency notes and bank notes are not promissory notes 2s Ber sec 4. PN may be payable on demand (Demand PN) or payable after someliine (Usance PN), 8. Bill of Exchange: defined ig,Section 5 of N I Act. Bill of exchange Is an.insiftiment in writing containing en unconditional order, signed by the maker, directing a certain person to pay 4: cértain sum of money only to, or to the order of, @ certain: BEtSof Gr fo, the, bearer of the instrument, In ai ‘ordering for payment is called’ Drawer and the person directéd to pay is calle called payee. ” ‘9. Cheque: defined in Sec 6 of NI Act. It is.a bill of ‘exchange but always payable on demand and drawee is always a banker. Thiis, a chéque is’ similar to-a Bill of Exchange. Further, any bill’ which is Payable on demand and in which drawee is a banker will be called cheque. The definition includes cheques in electronic form and truncated cheques. “EKG UNS TUE OR PISTANCEbEARNING. coffe mid (UsenbePN of UsiiterBOE). rAd timed Mehibnes hon hake i FR led act Del i promissory note or Demand Bill of Exchange. If these are payable after sometime called as Usance PN or BOE. 11,Bearer or Order: A riégotidbié instruffient can b@ fayabio to bearer or order. If neither béarer nor order is written itis treated as payable to order, If both bearer or ‘order are written it is treated as payable to bearer. 12,0n demand bearer instruments: As per Section 31 of RBI Act, 1934, no person other than Central Govemment or Reserve Bank of India or any other person authorized in this behalf can issue bearer promissory notes and a demand bills of exchange payable to bearer. 13.Presumption of N |; As per Section 118 of N I Act, N Lis presumed to be (i) made for consideration (ii) executed on the date appearing on the instrument and (fi) every holder is a holder in due course. 14.Inchoate instrument: defined in section 20 of the NI Act. It is an instrument on which date, payee or amount is not mentioned. It can be completed by the Holder and the completion will not be treated as material alteration. An instrument without sianatures is not treated as an instrument at all. 15.Ambiquous instrument: defined in Section 17 of NI Act. An instrument which can be treated es Bill of Exchange or Promissory Note is called as Ambiguous instrument. Holder Can treat it PN or BOE as per his discretion. 16,Holder: defined in section 8 of the NI Act. Holder of a promissory nate, bill of exchange or cheque means ‘ny person ened in his own name to the possession thereof and to receive the amount due theecon fant Parties thereto. ‘Bill of Exchange, the person d Drawee. The beneficiary is AK G INSTITUTE OF DISTANCE LEARNING 9350476949; aka.bti@amail.com; www.bankerstraininginstit ( itute.com) (orm WATERAL A San, hppa RIE ne ne oe TE eT ea asap teAK G@ INSTITUTE OF DISTANCE LEARNING (s1:09350476949; aka.bti@amail.com; www-bankerstraininginstitute,com) cone shi. Sami, tory Porro nett me aa etic de dn Cpr ted ee Lee At, 17.Holder in Due Course: defined In Seclion 9 pf the NI Acl. Holder in due course is a person wiho became Possessor of a NI for valuable consideration, in good faith, before becoming due, and without having any ‘eason to belleve that the person transferring the instrument was not enilted thereto. ‘Transfer of a Negotiable instrument and Endorsement ‘1. Transfer of 2 Negotiable instrument; by assignment (under Transfer of Property Act) or by Negoltation. 2, Negotiation: means transferring en instrument from one person lo another to consilute the trensferee the holder thereof 3. Negotiation of @ Bearer instruments: A bearer instrument is negotiated by mere delivery and no endorsement is required. 4, Negotiation of an order instrument: An order instrument can be negotiated by endorsement followed by delivery. It may be noted that legal heirs can not complete the negotiation of a negotiable instrument with endorsement by the deceased merely by delivery. 5, Title of Transferee: The transferee gets better tite, ifinstrument is taken for consideration, in good faith, 6. Endorsement: Signing of an instrument on the back or face thereof or on a slip of paper annexed thereto for the purpose of negotiation is called endorsement (Section 15). The person who transfers the instrument is called endorser and the person to whom itis transferred is called endorse. 7. Who can endorse: Drawer, holder, payee can endorse. 8, Liabilty of endorser: Under Section 35 of N | Act, lability of an endorser is similar to principal debtbr, 9. Blank Endorsement: In a blank endorsement the endorser just signs his name without indicating endorses. It can be converted into full by writing name of a person above signatures. The effect of an endorsement in blank is that it makes an instrument dawn originally payable to order to bearer Instrument for the purpose of negotiation which can be further negotiated by mere delivery. 10.Endorsement in Full: When; tijé endorser indicates the name of the endoisee itis called full endorsement, 11.Sans Recourse Endorsement SA Spdorsement jn which endorser excludes his lability Is termed ‘sans Tecourse’ or without recolfSe'éndersemiént: In case of.distionouf’ of ingtrumient, the amount can not be recovered from such endorser. = 12.Faoullative: An endorsement.in which endorser walves the rotice of dishonour is called Facultative endorsement, But this is not applicable to other parties to the iistrument. 48.Restriolive endorsement: An endorsement which restricts further right of negotiation is called as restrictive ‘endorsement. For example if it is written in the endorsement as “Pay to Hari for my usc” it is restriative ARC INSTITUTE QEDUSTANCE.LEARNING. Pay to C on completion of studies. Paying bank not to ensure compliance of condition. Condition binds endorser and endorsee only. 15, Back to Back Endorssifieni: An eridorséitient in which? tig eiidbrSer himself bécomée ghdarsee Is called as back to back endorsement and in such a case, tiie endorse Can recover the amount only from parties prior tohis own endorsement. 18.Neaotiation Back: When the drawer of a cheque himself becomes endorse, itis called "Negotiation Back" ‘and this cheque is treated as satisfied. 17 Partial Endorsement: The endorsement can be made only for full amount but in case part payment has been Tecelved and a note to that effect is made on the instrument, then the same can be endorsed for the balance amount, 18,Foraed Endorsement: When endorsement is made by a person other than Holder by forging signatures of Holder. Title does not pass to any person-on the basis of such endorsement. A person getting instru-ment after such endorsement does not become holder. PAYMENT OF CHEQUES Protection to paying banker: A paying banker gets protection under Section 85 of the Ni Act. 41. In the case of order cheques, protection is available under section 85(1) and for bearer cheques it is available under section 85(2) of NI Act. In the case of drafs itis available under section 85A. 14, AKG INSTITUTE OF DISTANCE LEARNING (4:09350476949; aka.bti@amail.com; ‘www.bankerstraininginstitute.com) Cornus WATER. iy Sang, pte x Ptacpy etwas mals lel eee Ina Capes Ae nd Ato fr ep Aton,AK G INSTITUTE OF DISTANCE LEARNING (M:09350476949; aka.bti@amail.com; www.bankerstralninginstitute.com) {OPIRIGT MATERIAL AY Sani hep x heey on on mae eg nen er el COB ea et ta fr Lps Alen. 2, AS per section 85(1) of the Act a paying banker is discharged by payment in due course of 2 cheque Payable fo order and which purports to be endorsed by or on behalf of payee, It means paying banker Is concemed about regularly of endorsement anc! not iis genuineness or forgery. 3. As per section 85(2) of the NI Act, a bank wil be dischargad of its liabllly by making payment in due course of a cheque payable to bearer if the payment is made in due.course notwithstanding any endorsement, If the cheque is endorsed, the bank is not required to take nole of any such endorsement. Thus as per section 85(2), ‘Once a bearer always a bearer’ Payment in due course is defined in Sec 10 of the Act and means (i) payment is accordance with the apperent tenor of the instrument(i) in good faith and without negligence (i)lo. any person in possession thereof (Iv) Under circumstances which don't afford a reasonable ground for believing that the is not entitled lo recelve Payment of the mount therein mentioned. Payment of a cheque: While making payment of a cheque, bank is required to lake certain precautions, (@) Form of the cheque has not been given in the Act. It is simply as per practice. However, RBI has prescribed format as per new cheque standards *CTS-2010', Ali banks providing cheque facilly to theit customers, will Issue only ‘CTS-2010' standard cheques across the country by December 31, 2012, (0) Different ink: A cheque can be drawn in different inks, handwitings or different scripts. Thus, a cheque Presented with different ink, handwriting or seript can be paid, (c) Language: The cheque should be written in Hindi, English or Regional language. Bank is within its powers to return a cheque written in a language other than the language of that region. (@) Signatures on Back: When a cheque is presented for payment signatures of the presenter are taken on the back as @ witness of payment. If the presenter refuses to sign, the bank can take receipt on a separate Paper. (¢) Date: Ants dated: A cheque dated prior to its date of presentation is called ante dated cheque and can be paid within 3 months from the date of issue, Post dated cheque NS a cheque which is dated \eques are valid in law. A post- ths thereafter. Stale cheque: RB] entation. Both ante-dated and post-dat ated cheque can be passed. only ofthe date writen on itor within 3 fént has reduced the period. wittin: which; ‘cheques/crefis/pay;-ordérSjpanier's: cheques are presented for Payment from six months to.thrée months:fromrthe. date ‘of such: instrument for instruments issued on or after April 1, 2012. It has beendone Because these instruments are.belag circulated in the market ike cash for six months. The drawer may, further feduee validity, and can revalidate,the cheque any number of times, {npossible Date: A chieque with impossible. Gate ike 31.11.20 should'Bo"paid on the last day of the month or within 3 months of the last day of the month. Chec dated prior the account: A cheque dated prior to the date of opening the account or issue of cheque book can be paid if otherwise in order, hea per National Sata SalaeSammvatl A cheque yrittn jo bln nga i i Bank siidotd heaves De piece Ares Ogiengar as eee ‘otherwise Tound in se inks: Sha ‘ascertain the Gregorian cSlentar date corresponding to the National Saka calendar in order to avoid payment of stale cheques (Amount : (i).The amount should.be.yriten, bot p.wores, and gure. (1) Amount in, words is called legal amount and amount written in figures‘is, Called. courtesy amount. (ii) As per Seo 18.of the NI Act, if the 7 amount written in words and figures differ, the,amount written in words will be the amount intended to be Payable. (W) If the balance in the accounts just equal to the amount of the cheque, the cheque will be paid. (0) I the balance in the account is insufficient t© pay the cheque, it should not be paid relying on the - balance in some other account or transferring the amount from other account unless there is an arrangement to that effect. It bank makes payment without sufficient balance In the account on which cheque has been drawn’ by relying on balance in some other account and customer contests the payment of cheque, bank may not be able to exercise the right of set off. (vi) If number of cheques are presented at the same time and the balance is not sufficient to pay all the cheques, then normally priotily is given to cheques favouring revenue authorifes, then to cheques favouring public authorites. if baianes is left, maximum number of cheques should be passed taking care thal cheque of very small amount is not dishonoured, (9) Banking Hours: As per section 85 of the Act, presentment for payment of a cheque must be made within banking hours. If @ cheque presented after banking hours is paid, it will not be a payment in Gue course. However, the peyment of a reasonable amount can be made to drawer even after banking hours. Further, the presentment should be within banking hours. Aclual payment may be even afier banking hours, (h) Mutilation: if there is any mutilation of cheque, it should be confirmed by drawer. A K G INSTITUTE OF DISTANCE LEARNING (1:09350476949; aka.b' il.com; www.bankerstraininginstitute.com) OPI HATER Sx, hot Pty of Buen sgh alec ns Idan Copy Set na fra alee AonAK G INSTITUTE OF DISTANCE LEARNING (M:09350476949; aka_bti@gmail.com; www.bankerstraininginstitute.com) CEPIRGIT MATERIAL AY Sean, stg Pte ods of is mt sa ep lec nde nd apy een yas re At, () Matertal alteration: (i) Any change in date, amount or name of payes is called material alteration. (il) The change from order to beerer, ar cancellation of crossing or converting special crossing to general crossing 's also material alteratfon. (ii) However, bearer to order or erossing a cheque or converting general crossing to special crossing or completing an incomplete cheque Is not material elleralion. (lv) If there Is any material alteration on a cheque it can be paid only after confirmation from drawer. In the case of joint accounts wilh “elther of survivor" clause any of the account holders can confirm material alteration. (¥) The coniirmation should be under full signatures as per specimen signatures (vi) With effect from 4" Deo 2010, in case of clearing houses where image based cheque truncation has started, cheques with material alteration will not be acceptable even if the same has been authenticated. This rule does not apply to change in date, (vi) Under Section 89 of the NI Act, 1881 paying banker gets protection in case of payment of materially altered cheques if the alteration is not apparent at the lime of payment and payment has been made in due course. @) Payee: if the payee is fictiious person then the cheque cen be paid to bearer if itis payable to bearer but if the cheque is payable to order, it can be paid only to the drawer. (&) Bearer or Order: it a cheque is payable to bearer or order, it can be paid to bearer. However, if neither bearer nor order is written itis payable to order. (0) Forged signatures: () If there is a forgery in the signatures, such an Instrument is null and void. Paying banker will not get protection if t pays such a cheque even though the drawer might have been careless in custody of the cheque book or bank might have sent statement of accounts and the cuslomer did not point out the mistake. (il) However, if the cheque has been signed by the drawer himself but in a different fashion, the banker wil not be liable. Crossing: (@) General Crossing; If a cheque or a draft bears across its face addition of two parallel transverse lines with ‘or without addition of words ‘and company’ or any abbreviation thereof, it is called General Crossing (Section 123), (©) General Crossing is a direction to the paying banker to pay the cheque/dret through some bank. (0) Even if the name of a clty.'s,written between two parallel iies:like-!indors itwill continue to be 2 general crossing and the cheque can' be paid to any bank. Such cheque can be paid at any station to a bank and not necessarily at indore. : (@) Special Grossing: When 2 chequeltraft bears the namé. of a parallel transverse lines eithér with or without the words ‘ot nei (Section 124). (©) A cheque withyspegialcrossi e-Paickoqly.tojthe named bank or bis authorized agent for collection. ; PERPe BALE ANE. o 19 cross ) Banks Hast Ue-felumed Srdsséd by-one ldnctiier asfhis agent for collection (Section127). (9) The special crossing fs in favour of a bank. and not Jn favour of a. particular. branch, Hence a cheque favouring PNE Bhopal, can be paid to'a brarich of acary aS Place also. ‘brane ois a (h) For special crossing itis not necessary that the cheque’ should bear two parallel lines. ())_ The Act does not restrict the payment of a crossed chéque to the banker in cash. Therefore, a cheque with general or special crossing can be paid to a bank in cash. () Apolicabilty of provisions relating to Crossing: Provisions relating to crossing are applicable to cheques and drafis only and not to Promissory Notes or Bill of Exchange. Therefore, if any Bill or Promissory note is having addition of two paral! lines or name of a banker, it does not have any effect. (X) Who can cross a cheque: The Crossing can be done by drawer, payee or holder or a banker. (0 ‘Account Payee" crossing (I) Account payee crossing is not recognised by law but is a long standing practice amongst bankers. (ji) Itis a direction to the collecting banker. (ii) Such a cheque can be collected for credit of the named payee and can not be endorsed. (m) RBL-quidelines on Account payee erossina: In consonance with the legal requirements and in particul intent of the Negotiable Instruments Act, and with a view to protect the banks being burdened with liabilities arising out of unauthorized collections, and in the Interest of the integrity and soundness of the payment ‘and banking systems, RBI in 2006, prohibited the banks from crediting ‘account payee’ cheque to the ‘account of any person other than the payee named therein, RBI has clarified that the practice of collecting nk across its face with or without two iable’, it is said to be Specially crossed 4 AK G INSTITUTE OF DISTANCE LEARNING (M:09350476949; aka.bti@amall.coni; www.bankerstraininginstitute.com) ‘optic NATAL ~ ANY Senin, tog a Ftc Enon me ipl lee und In Pg tT se Lgl Ao,AK G INSTITUTE OF DISTANCE LEARNING (M:09350476949; aka-bti@amail.com; www.bankerstraininginstitute.com) Commis st - a Seng singe Payer extinct Ns mate sig alice efi Ci tn hy i ep Aen, third party account payee cheques on behalf of co-operative credit societies who are their constituents IS generally not permissibie but banks may consider collecting account payee cheques dravin for an amount ot exceeding Rs.50,000/- fo the account of their customers who are co-operative credit soclelies, If the ayees of such cheques are the constituents of such co-operative credit societies. (n) (Not negotiable’ crossing takes away an important characteristic of negotiabilily. A cheque with Not Negotiable crossing remains freely transferable and can be endorsed. But a person taking a cheque crossed generally or specially bearing in either case the words ‘not negotiable’ shall not have and shall not be capable of giving a better tile to the cheque than that which the person from whom he took it hac (Section 130), Nobody will be a holder in due course of a cheque bearing Not Negotiable Crossing, Cancellation of crossing can be done by drawer only under his full signatures by writing the words crossing cancelled. In such cases, the payment is made in cash to a person known to the bank. (P) Under Section 128 of the NI Act. The paying banker is will get protection in respect of crossed cheques or drafis provided the instrument has been paid In accordance with the requirement of the crossing and Payment has been made in due course. (@) As per Section 129 of the N | Act, if a banker pays a cheque in violation of the crossing direction, it will not be '@ payment in due course and bank shall be liable to the true owner of the cheque for any loss he ‘may sustain owing to payment of the cheque. ©) Migrating to CTS 2010 standards: RBI has introduced CTS for clearance of cheques facilitating the presentation end payment of cheques including Government Cheques without their physical movement. All cheques issued by banks (including DDs / POs issued by banks) shall conform to CTS-2010 standard, Drawee banks wil retum the non-CTS-2010 instruments, if any, presented in the regular GTS clearing, under the reason code '37-Present in proper zone’. Others. a) Instruments retumed unpaid ‘should have a si reason for refusing payment must be stated. on which a definite and valid 5) RBI has suggested folowing for preventer of treuds ~/()-efabnation ddr UV lamp forall cheques beyond a threshold of say, R&.2 lakh (i), Checking at mulipleslevels, of cHéques above a threshold of say, Rs. 5 lakh; (ii) Sending an SMS alert to palyeridrawer when cheques ai ‘aesved in clearing; (Iv) Alerting the customer by. phone call and: getting the’ confirmalion frrh the’ paveddrawer.andior contacting base branch in case of non-home chequéS for dealing with peeee or'largé Value GHequés (in relation to an account's normal level of operations). ©) Belay jn. ntatigngof techpical,return et an; ofycharges. for such yreturpsim(a) AR GSES Tere era Nicer penne such retains. (b) Cheques thatneed to be re-presonted without any recourse tot 1€ payee, shall be made in the immediate next presentation clearing not later than 24 hours (excluding holidays) with due notification to the customers of such e-presentation through SWS alert, email etc ER Sse Ba a DISHONOUR OF CHEQUES DUE}. INSUFFICIENT BALANCE 1. Law on making bouncing of cheques for insufficiéney of funds a penal offence was recommenced by Rajamanar Committee. The said Act has been made effective from 01.04.1989, 2. AS per Section 136 of the Act, if any cheque drawn by @ person on an account maintained by him with a banker for payment of any amount of money to another person for the discharge, in whole or in part, of any debt or other Iability, is returned by the bank unpaid, either with the reason funds insufficient or exceeds arrangement or similar reason, such person shall be deemed to have committed an offence. 3. As per judgements of the Supreme Cour, the cheques which are dishonoured on account of the payment being stopped by the drewer or Account being closed will attract Penalty prescribed under Sec 138 of the Act. 4. Penalty as per section 138: In case of dishonour of cheque due to reasons stated above, punishment can be Imprisonment up to two year, or maximum fine up to twice the amount of the cheque, or both. 5. Condit Jnvoking section 138: The provisions of this section shall apply when the following conditions are salisfied: (a) the cheque has been presented to the bank within a period of six months from the date on ‘which it is drawn or within the period of its validity, whichever is earlier (b) the cheque had been received 5 AK G INSTITUTE OF DISTANCE LEARNING (209350476949; i il.comy ‘www. bankerstraininginstitute.com) MATERIAL Ay Sarg, pogo Psy orn tO res aig eres unde dn Coops Rte eae eg Ae, commaAK G INSTITUTE OF DISTANCE LEARNING M:09350476949; i www.bankerstraininginstitute,com) : COPIRIGIT MATEAL 1 Sx, htop cope route of Us el sgh ice Ue Inn Cp aT ated er Lea Aon, ‘or consideration (¢) the payee or the holder in due course of the cheque, makes a demand for the payment of the sald amount of money by glving a notice, in writing, to the drawer, of he cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheques as unpaid, and (d). the Grawer of such cheque fails (o make the payment of the said amount, to the holder in due course of the cheque, within teen days of the receipt of the said notice. As per Sec 139 of the Act, unless the contrary is proved, it shall be presumed, that the holder of @ cheque received the cheque for the discharge, in witole of in part, of any debt or other lability. 6. Liabilly of Directors: As per Sect 141 of the Act, If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the compeny as well as the company shall be deemed to bbe quilly of the offence. However, the nominee directors employed in Central or State Govt or a financial corporation controlled by the Central or State Govt shail not be liable. Further, ifit is proved that the offence was committed without the knowledge of the concemed official of ihe company he will not be lable. 7. Filina of suit: The complaint in such cases should be matte in the court of a metropolitan magistrate or a Judicial magistrate of the first class or above within one month of the date of the cause-ofaction (ie. if Payment is not made within 15 days). Period can be extended by court. Unless otherwise disproved, Bank's cheque returning slip or memo having official mark of the bank shall be presumed to be proof of dishonour of the cheque. 8. Place of Filing Suit: Suit can be filed in a court with jurisdiction over the bank branch where payee has account if cheque is deposited for collection. if cheque is presented for cash payment by payee, the place is with respect to the bank branch where drawer maintains the account. 9. Latest Amendment (2° August 2018)-The Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant up to 20% of the amount of the cheque. The interim compensation shall be paid within sixty days from the date of the order which may be extended by 30 days by the court, Ifthe drawer of the cheque is acquitted, the Court shall diréct the complainant to repay to the drawer the amount of ifférim, compensation, with interest at the bs te as published by RBI at the beginning of the relevant financial Year, within sixty days from the dato-of:the order. This period may be extended by 30 days. As pet ney, Section 148, the Appellate Coli ay Grder the appellant to deposit a minimum of 20% of the ‘fing Of.cor tion awarded by the-irial:Courtg,Thé amount payable under this ‘sub-section shall be in addi iva iiterin compensation pald by. the. appellant. The Appeliate Court may een at any time during the direct the release of the mont: deposited by: the appelieit to Sie Pendency of the appeal. Ifthe appellant is. acquitted, the Couri shail deck thé complainant to repay to the appellant the amount so released; wilh interest‘at the bank rate as publishéd by RBI at the beginning of the relevant financial year. i Rules regarding dishonoured Cheges * Gr NSTEFUEE: OnE ANGE LEARNING « 2. Monthly report to be sent to Controlling Office for cheques of RS 1 crore received back as dishonoured. 3. Ifa cheque is reliitried due to technical reason, “aid cheque nééd to bé'ié-preséntEG WithOUt any recourse to the payee, such re-presentation should Bs" male ih. the immediate next clearing within maximum 24 hours. No cheque retuming charges to be levied in sticifeades, 4, Earlier, if 4 cheques of Rs 1 crore and above each, were dishonoured in a Financial year, from an account ue to insufficiency of funds, banks were required to withdraw cheque facility. Now, RBI has advised banks to decide this matter at their own level. Positive Pay System for Cheque Truncation System 1. The concept of Positive Pay involves a process of reconfirming key details of large value cheques. Under this process, the issuer of the cheque submits electronically, through channels like SMS, mobile app, intemet banking, ATM, etc., certain minimum details of that cheque (like date, name of the beneficiary / payee, amount, etc.) o the drawee bank, details of which are cross checked with the presented cheque by CTS. Any discrepancy is flagged by CTS to the drawee bank and presenting bank, who would take redressal measures. 2. National Payments Corporation of Inia (NPCI) shall develop the facility of Positive Pay in CTS and make it available to participant banks. Banks, in turn, shall enable it for all account holders issuing cheques for ‘amounts of Rs 50,000 and above. 6 AK G INSTITUTE OF DISTANCE LEARNING (M:09350476949; aka.bti@amail.com; www.bankerstraininginstitute.com) ‘corte waTERIAL AY Snipe Pcp edie str eg are Stn Cs ett wT i Lg ton,