Settling Accounts

this is with reference to the letter by former RBI governor S Venkitaramanan on a/c payee cheques (BS, June 6). He fears that chaos will result due to the arbitrators award and bankers will start crediting a/c payee cheques to unauthorised accounts, including bearer ones. This is not correct. The lesson to bankers is: Do not issue cheques favouring Grindlays Bank when you want to pay Harshad Mehta, as was done by NHB. The account payee rubber stamp will not come to your rescue. The issues is not how to write cheques but how to pay cheques.

Most of the commercial banks got the message correctly. One hopes that NHB, the fully owned subsidiary of RBI, will be guided accordingly when issuing cheques in future.