Cheque frauds of Rs 1 lakh & above at Rs 18.62 cr by Dec

Cheque and demand draft related frauds pertaining to Rs 1 lakh and above amounted to Rs 18.62 crore during the first nine months of the current fiscal, Parliament was informed today.
The accruals of such amount was in relation to a total of 165 cases of cheque/demand draft related frauds, Minister of State for Finance Jayant Sinha said in Lok Sabha today.
These cases were reported by the banks to the Reserve Bank.
In previous fiscal 2014-15, the amount involved as a consequence of cheque/demand draft frauds stood at Rs 26.11 crore (total of 254 cases), in 2013-14 it amounted to Rs 18.79 crore (180 cases) and in 2012-13 Rs 22.38 crore (141 cases).

Citing RBI, Sinha said banks are advised to review and strengthen the controls in the cheque presenting/passing and account monitoring processes to ensure that all procedural guidelines are followed.
"Further, banks are advised to take appropriate precautionary measures to ensure that the confidential information like customer name, account number, signature, cheque serial numbers and other related numbers are neither compromised nor misused either from the bank or from the vendors (printers, counters etc) side", he added.

Further, Parliament has passed the Negotiable Instruments (Amendment) Act in December 2015 that facilitates filing of cheque bounce cases only in a court within whose local jurisdiction the bank branch of the payee is situated.

"The clarity on jurisdictional issue for trying the cases of cheque bouncing would increase the credibility of the cheque as a financial instrument", Sinha said.
This is expected to help the trade and commerce in general and allow the lending institutions, including banks, to continue to extend financing to the productive sectors of economy, he added.
He said the process of pursuing cheque bouncing cases relating to the loan default has been made simpler and efficient through amendments to the Negotiable Instruments Act, 1881.