The Reserve Bank of India (RBI) has amended banking rules, effective August 1, making bulk clearing facility available round the clock.
The National Automated Clearing House (NACH) is now operational 24 hours a day, which means cheques can go for clearing and get encashed even on non-working days and holidays.
So before issuing a cheque, customers must ensure that their account has a sufficient balance, otherwise their cheques will bounce. If the cheque bounces, the customer will incur a penalty.
What is NACH?
NACH is a bulk payment system operated by the National Payments Corporation of India (NPCI). It facilitates one-to-many credit transfers such as payment of dividend, interest, salary and pension.
It also facilitates the collection of utility payments pertaining to electricity, gas, telephone, water, periodic instalments towards loans, investments in mutual funds and insurance premiums.
Starting January 1 this year, the RBI implemented a ‘Positive Pay’ system to safeguard against cheque frauds. The system, developed by NPCI, is a process of reconfirming key details of high-value cheques for amounts of ₹50,000 and above. Under it, a person issuing a high-value cheque submits certain essential details of that cheque like date, name of the beneficiary/payee amount, etc, to the drawee bank. The details can be submitted through electronic means such as SMS, mobile app, internet banking, ATM. The details are cross-checked while issuing the cheque and any discrepancy is flagged.