Mumbai, Nov 6: From April 1 next year, cheques and bank drafts will have a life of just three months instead of the earlier six.
In a notification on Friday evening, the Reserve Bank of India has said these instruments will have to be presented within three months from the date of issue as it has been brought to its notice by the government that some persons were taking undue advantage of the six month validity of cheques/drafts/pay orders/banker's cheques by circulating them like cash for this period.
For customer awareness, banks have been asked to print the change on cheques and drafts that will be issued from April 1, 2012.
Similarly, in a bid to curb circulation of black money, the RBI has made it mandatory for all demand drafts above Rs 20,000 to be account payee only.
In 2005, after the finance ministry introduced the banking cash transaction tax, it was found that a lot of cash was being withdrawn from banks using demand drafts.
Subsequently, a series of Income Tax raides revealed that these drafts were being used as an instrument to transact black money and payments made in cash after getting these drafts discounted.
