Physical Cheques to be withdrawn by 2020

It has been noticed that lots of paper is being used to print Physical Cheques, apart from the other risks in handling cheques.

Hence, the Home Ministry has decided to set up a High Powered Committee to recommend strategies to eliminate Physical Cheques.

Time Frame

1. 01/04/2012 - Announcement of Constitution of the High-powered Committee by Home Ministry.
2. 01/05/2012 – The Committee meets for the first time.
3. 15/06/2012 – Comments invited from public and other participants in the finance sector.
4. 16/06/2012 to 31/12/2012 – Committee members travel around the country, holding Open Houses, to know the views of the bank’s customers.
5. 01/04/2013 – The Committee members meet and deliberate on the feedback obtained from various sources.
6. 01/05/2013 – Sub-committees formed to formulate the exact strategy for withdrawal of the Physical Cheques.
7. 31/12/2013 – The Sub-Committees submit the working report.
8. 01/04/2014 – Draft Report released to the public, inviting their comments.
9. 30/09/2014 – Final report with a detailed rollout plan
10. Every 3 months till 01/04/2020 – Sub-Committees meet, to track the progress and to resolve any gridlocks on the way.

01/04/2020 – GoodBye to Cheques

Exception: If cheques have to be used, than the payment will be made at any of the respective bank branches via cash or electronic transfer to another bank account.

Here in this article, the Pros and Cons of withdrawal of Physical cheques, will be discussed.

Pros :

1. Environment friendly – Paper saved, Storage cost saved.
2. Frauds minimized – Frauds relating to cheques handling eliminated
3. Cheque Bounces – Cheque Bounces especially due to INSUFFICIENT FUNDS will be history.
4. Cash Circulation - It is observed that still large number of cash transactions take place, which require strict AML (Anti-Money Laundering) rules. Such cash transactions will be eliminated.
5. Post-dated cheques – PDC’s cheques now common, will be eliminated.

Cons :

1. Strong political will combined with the behavioral change in our countrymen required.
2. Senior Citizens: Strong alternate solutions tobe in place, to ensure Senior Citizens are not troubled. However, cash withdrawals via cheques will continue.
3. Infrastructural cost : Huge infrastructures cost to set up alternates.

Disclaimer: Subject to your belief i.e 01/04/2012