RBI/2009-10/213  
DBOD.No.Leg.BC.59 /09.07.005/2009-10

November 9, 2009

All Scheduled Commercial Banks
(Excluding RRBs)

Dear Sir,

Dishonour of Cheques –
Dealing with incidents of frequent dishonour

Please refer to paragraph 15.4 of our Master Circular DBOD.No.Leg.BC.9/ 09.07.006/2009-10 dated July 1, 2009 on Customer Service wherein banks have been advised to take certain steps for dealing with incidents of frequent dishonour of cheques of Rs. 1 crore and above.

2. In this connection, it may be mentioned that frequent dishonour of cheques of value of less than Rs. 1 crore is also a matter of concern and banks need to take appropriate action in those accounts where such dishonour of cheques occur. Though it may not be necessary to extend all the steps laid down in paragraph 15.4 of our Circular to smaller cheques, banks can have their own approach to deal with recalcitrant customers. Banks are therefore advised to have a Board approved policy for dealing with frequent dishonour of cheques of value of less than Rs. 1 crore.  The policy should also deal with matters relating to frequent dishonour of ECS mandates.

Yours faithfully

(B. Mahapatra)
Chief General Manager