adsense

Wednesday, September 21, 2011

Dishonor of electronic funds transfer for insufficiency of funds in the bank account – clarification





Today Reserve Bank of India, DPSS has issued a clarification on Dishonour of electronic funds transfer for insufficiency of funds in the bank account.
The Press Release can be accessed @ RBI Press Release

The clarification was necessary, as the general market opinion was that on ‘Dishonour of electronic funds transfer for insufficiency of funds in the bank account’, equal protection as under penalties stipulated for dishonor of cheques under the Negotiable Instruments Act, 1881, were not available

Through this clarification, RBI has informed that electronic funds transfer are on par with the penalties stipulated for dishonor of cheques under the Negotiable Instruments Act, 1881.

This clarification should now encourage migration of Loan Payments from the paper-mode to electronic mode.  

It is to be noted, in case of electronic funds transfer i.e Electronic Clearing Services-Debit, the Sponsor Bank can generate the requisite reports in case the ECS transaction is ‘returned.’

As everything moves electronically, the data can be exchanged quickly amongst the various participants in the process.

For an interesting article on the dishonor of cheques under the Negotiable Instruments Act, 1881, please refer here  NI ACT - Dishonor of Cheques

4 comments:

tauruskvs said...

i would like to know what is the penalty on a bank if an neft credit is delayed. how are the banks accountable.

Partha said...

Hi,

From when it is going to get implemented???

Safe ePayments Motivator said...

HI Partha,
The same has already been implemented. RBI has just issued an clarification.

Safe ePayments Motivator said...

Hi,
pls refer to Point No 14, in the enclosed document

http://www.rbi.org.in/scripts/FAQView.aspx?Id=60

LinkWithin

Related Posts with Thumbnails

Disclaimer

The thoughts in this BLOG are personal, and reflect only my view on the subject.
This are not the views of my Employers.
All images, logos rights rest with the Original TitleHolders

All efforts have been made to make this information as accurate as possible, N Prashant will not be responsible for any loss to any person caused by inaccuracy in the information available on this Website. Relevent Official Gazettes Communications may be consulted for an accurate information. Any discrepancy found may be brought to the notice of N Prashant