The Reserve Bank of India (RBI) has announced that from next fiscal year beginning from April 1, 2012, the payment against cheques, drafts, pay orders and banker’s cheques will only be valid for 3 months from the present 6 months.

RBI has taken this step in order to tame the misuse of these instruments and check the flow of black money. RBI has also advised all the banks to print the validity on cheques as well as on the other instruments so that the user is aware of it.

“It was reported to Central Economic Intelligence Bureau (CEIB) that some persons are taking undue advantage of the practice of banks of making payment of cheques or draft presented within a period of six months from the date of the instrument as these instruments are being circulated in the market like cash for six months,” said the Minister of State for Finance Namo Narain Meena.