Follow norms on issuing DDs: RBI to banks

The Reserve Bank of India (RBI) today said some banks had breched guidelines by issuing demand drafts of Rs 50,000 and above on deposit of cash and asked the lenders to stick to the rules.

According to the existing guidelines, demand drafts and other such intruments such as mail transfers, telegraphic transfers and travellers cheques for Rs 50,000 and above should be issued by banks only by debit to the customer's account or against cheques and not against cash payment.

"It has been brought to our notice that some banks have recently issued demand drafts of Rs 50,000 and above on deposit of cash and not against debit to the customer's account or against cheques or other instruments tendered by the customer," the RBI said in a notification.

It asked the banks to comply with thr rules which were laid down back in 1991.

"Any violation of these instructions will be viewed seriously," the RBI said, without disclosing the identity of the concerned banks.

The apex bank termed the breach of the guidelines as a matter of serious regulatory concern and said such practices could have wide ranging ramifications.