All cheques, drafts, pay orders and other monetary instruments issued in India will have only a three-month validity beginning April 1, 2012, instead of the existing six months, a Reserve Bank of India (RBI) communique has said.
Local and foreign banks have begun alerting their customers on the change, which is a consequence of an RBI notification issued last November.
“In line with the RBI’s notification of November 4, 2011, the validity of all cheques, drafts, pay orders and banker's cheques will be for 3 months only. This is effective 1st April 2012,” Citibank said in an emailed alert sent to its non-resident Indian (NRI) clients.
“[K]indly ensure that all such instruments, from April 1, 2012, are presented within 3 months of the date on the instrument, for successful clearance. Please note that instruments presented after this period of 3 months will not be cleared,” the alert says.
“This change is applicable across all banks in India, and covers all instruments that are issued or received by you,” it notes.
At the same time, banks are reminding NRIs that, according to RBI norms, it is mandatory to mention the objective of money transfer on all remittances to their bank accounts in India.
“As per the Reserve Bank of India’s guidelines relating to remittances, we are required to furnish reports of the purpose of transfers on remittances, received,” Citibank said in another alert to its NRI customers.
“Remittances that do not have a valid purpose of transfer mentioned could be withheld till the purpose of transfer is established, or could subsequently be returned if the purpose is not made available,” it warned.
India is the world’s largest recipient of remittances, according to a World Bank report. “Anecdotal reports from money transfer companies suggest that remittances from the GCC countries surged in the third and fourth quarters of 2011 because of the weak rupee,” the World Bank said in its report on global remittances, quoting Emirates 24/7 as a source.
With 2011 remittances estimated at $58 billion by non-resident Indians (NRIs) across the world, India leads the world in inward remittances, followed by China ($57bn), Mexico ($24bn), and the Philippines ($23bn).