Can RBI clear post dated cheques in advance ?

[MAGNeT]

Well i gave one post date cheque of 5th july to a party worth 1 lakh rupees.

Though i had 1 lakh 15000 rupee in my account but already i had given another cheque worth 1 lakh 5000 to another party for date 28th june 2011.

Also on 4th july one cheque worth rupee more than 1 lakh(cheque from another party) would had cleared to my account.

Hence both cheque of 1 lakh 5000 and 1 lakh would had clearly if the respective date would had been followed.

Now somehow the party carrying 5th july cheque worth rupee 1 lakh deposited the cheque in his branch.At the same time 28th june party cheque also went for clearance and both went to RBI on 2nd july 2011.

Now what happened is RBI cleared the post dated amount cheque from my account and than cleared the 28th june cheque and as balance turned negative reversed the 28th june cheque(in short cheque returned).

I want to know how is this possible.

I went to my branch but he says no updation happens before 3 in the evening in branch so i should visit again on monday to enquire to them.

Than i tried phone banking and they say RBI can deduct the post dated cheque in advance if you have money in account.I was like if on 4th it would had been done it would still had been ok how today when one genuine(in terms of date) payment is getting reversed
.
But because of this deed one of my genuine payment have been reversed which will bring a negative goodwill plus penalty charges to my account.

My question is just that can RBI clear post dated cheques in advance and that too 3 days (not 1 day).

Note::Bank is HDFC.

 

[Punker]

Well in my bank (Canara Bank) if somebody deposit cheque before it's original date, the cheque is bounced and penalty is charged from party who has issued the cheque.

 

[agantuk]

Neither RBI nor HDFC can clear a post dated cheque in advance, whatever be the circumstances. Call up the bank (HDFC) and ask them why they did that, and also ask them to give you a written statement acknowledging this error so that you can show it to the other party.

PS: I hate HDFC, and from my experience with them, I would rate them the worst 'big' bank in India, far below any of the others.

 

[setuniket]

Neither HDFC nor RBI can clear a PDC, a PDC is not a valid cheque until the date on which is drawn. Contact HDFC with the complete details and ask them to get the cheque back as either its their mistake or the party has tampered the instrument. In both the cases you are not liable for the PDC.

W.r.t the bounced cheque you would already paid to the party whose cheque bounced because whatever be the reason the onus lies on you to pay him for mistake of yours.

EDIT: usually the person who receives the cheque from the payee would refuse to accept the cheque or if from drop-box then return marked as 'post-dated' with the charges if any for such mistake.

 

[devagral]

RBI has no role in clg. of cheques. It simply works as an exchange center where representative of different bankers meet and exchange cheques pertaining to their respective banks among themselves, thereafter they carry these cheques to their banks to verify that the a/c from which the cheque has been issued has sufficient funds to pay the amont mentioned in the cheque, debit the a/c by that amount and clear the cheque for payment, meet again at RBI, re-exchange the cheques so treated.
In your case it is certain that somebody working in your bank illegely favoured the party to whom post-dated cheque was issued. Please submit your complaint , against acknowledgement, to your bank. I'm certain they do'nt have anything to justify their action. After getting their reply or three months, whichever is earlier, take the matter up with ' Banking Ombudesman '. I'm sure the outcome will be to your utmost satisfaction.

 

[MAGNeT]

RBI has no role in clg. of cheques. It simply works as an exchange center where representative of different bankers meet and exchange cheques pertaining to their respective banks among themselves, thereafter they carry these cheques to their banks to verify that the a/c from which the cheque has been issued has sufficient funds to pay the amont mentioned in the cheque, debit the a/c by that amount and clear the cheque for payment, meet again at RBI, re-exchange the cheques so treated.

In your case it is certain that somebody working in your bank illegely favoured the party to whom post-dated cheque was issued. Please submit your complaint , against acknowledgement, to your bank. I'm certain they do'nt have anything to justify their action. After getting their reply or three months, whichever is earlier, take the matter up with ' Banking Ombudesman '. I'm sure the outcome will be to your utmost satisfaction.

Thanks for the reply.

Just to be on safe side i transferred funds from my savings account in same bank to current account via NEFT.

The original cheque which was returned got cleared (as seen by me on my computer) with the help of funds i transferred.That way i guess i got secured from penalty charges as same cheque cant be returned and re-deposited on same day and i pay charges on it.

Now the post dated cheque which was cleared have been returned and the amount re-deposited into my account with an entry post dated cheque return.

Now I need to take keep a tab on charges charged to me if any.As its definitely not my side mistake and its the branch duty to refuse to take post dated cheques unless the party deposited it via drop box facility.

The phone banking guy told me to have chat with my relationship manager if any charges is charged to be waive off.I am keeping a close taB on my account to see any unknown charges done on behalf of the bank.

So far relationship with my bank is good plus i have no plans to withdraw my account for such silly mistakes from both sides bank and the party.But ill definitely wont allow them to charge me for their mistake as they never allow me for my mistakes and fine me.

 

[setuniket]

They shouldn't have debited your account against PDC in the first place. Even if the cheque was deposited through drop box, the bank cannot first deduct money and then refund later stating PDC, it is their liability to check the instrument before debiting your account. At this point of time you should seek damages/costs incurred by you(if any) and yes do that by email/fax communicate that they should not repeat this mistake again.

 

[blr_p]

Magnet

I had this query sometime back because a friend in the US told me there is no concept of post-dated check there. If you issue a check with a date 2 months in the future the recipient can go and get it cashed imediately. As a cheque is like money there and there is no time contraint.

Now as far as India is concerned there is no way to encash a check before its due date. Three banks have told me this. Yours is an interesting race condition.

 

[logistopath]

@OP: ALso make sure to keep an eye on your CIBIL record; make sure that this incident does not reflect badly on your credit history. Take it up with the bank to clear any such remarks, if they do appear.

 

[MAGNeT]

Magnet

I had this query sometime back because a friend in the US told me there is no concept of post-dated check there. If you issue a check with a date 2 months in the future the recipient can go and get it cashed imediately. As a cheque is like money there and there is no time contraint.

Now as far as India is concerned there is no way to encash a check before its due date. Three banks have told me this. Yours is an interesting race condition.

Abroad i can understand as majority of the transactions are card related and also getting overdraft on something wont be a trouble.But here its charged with heavy interest and hence how clear your record be they dont provide free OD service.

Here in India the practice is of rotating Demand drafts which is considered as money.One party creates a demand draft and pay to party ,and party instead of en-cashing give it to third party for payment and so on.Though i havent tried it ever so i have no idea how it works as the name of second party might be on DD and they can only en-cashed it and bearer DD i dont think is possible to made or is risky as cash to carry.

@OP: ALso make sure to keep an eye on your CIBIL record; make sure that this incident does not reflect badly on your credit history. Take it up with the bank to clear any such remarks, if they do appear.

Yes i am keep a watch on my account.I am checking thrice a day my account to see whether any charges happening or not.

Regarding CIBIL i dont think personal party payment cheque defaulting is recorded.

Its mostly home loan repayment default and credit card payment defaulting which is reported.Also if you default some loans like education or others that too for a month than its reported.Not just a single entry of return.Also the return reason now is post dated cheque hence i think i am on safe side as its the party who was depositing the cheque should have taken care of.Also i dont plan to go for any banking loans in near term so i am not worried about.

 

[setuniket]

As per Indian Laws a Post dated cheque is a Bill of Exchange till the date of payment mentioned in the the cheque. Its a valid instrument for negotiation as well. However the bank cannot pay on PDC. At this point of time CIBIL only has data on credit history of your current/past loans and advances and not any other data(dishonour of cheque in this case).

 

[blr_p]

Abroad i can understand as majority of the transactions are card related and also getting overdraft on something wont be a trouble.

Don't think you got the fine point here. I'm referring solely to the US, so using a term like 'abroad' is a bit vague.

What i wanted to say is if you give somebody a bunch of post dated cheques, say beginning of each month, they can take all those cheques and encash them immediately. They do not have to wait for the cheques to come due is the main point. Cheques are like cash in the US.

Your situaiton here is a bit unique in the sense it should not happen. If you issue cheques with different dates then they should only be cleared AFTER the due date. Now if you date them accordingly you don't need an overdraft facility at all.

Here in India the practice is of rotating Demand drafts which is considered as money.One party creates a demand draft and pay to party ,and party instead of en-cashing give it to third party for payment and so on.Though i havent tried it ever so i have no idea how it works as the name of second party might be on DD and they can only en-cashed it and bearer DD i dont think is possible to made or is risky as cash to carry.

What you did should have been ok, but its curious a cheque was encashed BEFORE its due date. That's not supposed to happen in India.

 

[Emperor]

Something fishy with your account, the party whom you issued check & Banker who approved Post Dated Check. My suggestion just closed the account with Bank & move to other.

 

[MAGNeT]

That's not supposed to happen in India.

This is India what you doesn't expect that's happened.

Something fishy with your account, the party whom you issued check & Banker who approved Post Dated Check.

Lol the post dated cheque was later reversed with same heading cheque post dated.

I asked 3-4 people and they say the party will have to pay penalty as its their fault depositing the cheque in advance even after knowing its post-dated.A person knows when money will come to his account so he will give cheque according to his comfort.But i wont take chances and will keep a tab for couple of more days and month ending to see any fishy withdraw.