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Friday, March 23, 2012

50% Off – Indian Cheques, Drafts, Pay Orders life slashed from 6 months to 3 months




Well, the day of reckoning has finally come. From 01/04/2012, the lifespan of Cheques, drafts will be reduced from 6 months to 3 months.

This is in accordance with the RBI notification dt04/11/2011.

5 Points of this change:
  1. All Cheques,Drafts I.e paper based clearing instruments will be affected.
  2. The lead time of 4 months+, has enabled all the players in the financial market to be acquainted with the new rules.
  3. This will increase the efficiency in the Cheque Collection process, as the lead time has been lessened.
  4. This will reduce the inefficiencies associated with post-dated cheques.
  5. This will encourage migration to electronic Payments, ePayments are instant

15 practices in other parts of the world.

Cheque/Drafts are valid for a certain amount of time after the date of issued.

The following are the Cheques/Draft validity rules in major countries of the world


  1. Australia : - Cheques - Most banks in Australia accept cheques regardless of the date. Bank drafts expire after 6 months. After 6 months upto years, the drafts can be presented directly to the issuing Australian bank.
  1. New Zealand - 6 months
  1. Brazil – Cheque/Drafts 6 months
  1. China - Cheques still not popular
  1. France - One year, one week, and one day (373 days)
  1. Germany - Cheques - Presentation period is eight days. However, a cheque is valid without time limit unless revoked by customer. Draft - No time limit
  1. Greece – Cheque/Drafts 5 years

  2. Italy - Cheques - No time limit. Bank Drafts - 30 days
  1. Indonesia – Cheque/Drafts 90 days
  1. Japan – Cheques are very rare.

  2. Spain - Cheques/Drafts - No time limit
  1. Portugal - Cheques 8 Days

    14) Switzerland - Cheques are valid for six months and eight days from date of issue. However, after this period, they still can be be cleared by special arrangement with the issuer or his/her bank manager. Bank draft validity periods - 6 months
  1. United States of America - Cheques are valid, legally, for six months, then can be considered “stale dated”. A peculiar feature of USA banking rules, is that the Cheques may be returned for a period of seven years for fraud or forged endorsements. There is no time limit for encashment of drafts, but after 6 months, drafts are paid with extra due diligence. 

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