Issue of DDs for Rs. 50,000 and above - RBI instructions
RBI had issued a Circular in April 1991 in terms of which demand drafts, mail transfers, telegraphic transfers and travellers cheques for Rs. 50,000 and above should be issued by banks only by debit to the customer's account or against cheques or other instruments tendered by the purchaser and not against cash payment.
In 1999, these instructions were extended to retail sale of gold/silver/platinum.
It has been brought to RBI's notice that some banks have recently issued demand drafts of Rs. 50,000 and above on deposit of cash and not against debit to the customer's account or against cheques or other instruments tendered by the customer.
RBI states, “ In the current scenario where the integrity of the financial system in general and the banking channels in particular is of paramount importance, breach of these guidelines is a matter of serious regulatory concern in view of the wide ranging ramifications ”.
RBI reiterates the instructions and wants strict compliance by Banks.
Any violation of the instructions will be viewed seriously.