Friday 1 April 2011

Cheque payments just got costlier!

Making payments through cheques may become a costlier affair from today, as RBI has allowed banks to levy higher service charges for their clearing, especially of high-value and outstation cheques.

As per a RBI circular coming into effect from April 1, 2011, banks would be free to fix service charges on speed clearing of cheques of value above Rs. 1 lakh.


 At present, RBI does not allow banks to charge more than Rs. 150 per cheque for speed clearing of cheques worth over Rs. 1 lakh, while there are no charges for value up to Rs. 1 lakh.

However, speed clearing of cheques with value up to Rs. 1 lakh would continue to remain exempt of any service charges.

Besides, RBI has also given a free hand to the banks to decide on the service charge on outstation cheques of over Rs 1 lakh, as against a maximum limit of Rs. 150 per cheque allowed currently.

However, RBI has decided to lower the service charge for outstation cheques up to Rs. 5,000 by allowing a levy of Rs. 25 as against Rs. 50 currently.

The outstation cheques between Rs. 5,000 and Rs. 10,000 would continue to attract a fee of Rs. 50, while those between Rs. 10,000 and Rs. 1 lakh would also continue to be levied a charge of Rs. 100.

"Charges fixed should be reasonable and computed on a cost-plus-basis and not as an arbitrary percentage of the value of the instrument. The service charges-structure should not be open ended and should clearly specify the maximum charges that would be levied on customers including charges if any, payable to other banks," RBI has told the banks.

Source: http://www.rediff.com/business

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