Cheque related fraud cases – preventive measures
RBI/2014-15/303
DCBR.CO.BPD.(PCB). Cir No 2/12.05.001/2014-15
DCBR.CO.BPD.(PCB). Cir No 2/12.05.001/2014-15
November
13, 2014
The Chief Executive Officer
All Primary (Urban) Co-operative Banks
All Primary (Urban) Co-operative Banks
Dear Sir / Madam,
Cheque related fraud cases – preventive measures
The rise in the number of cheque related fraud cases is a matter of serious concern. It
is evident that many of such frauds could have been avoided had due diligence
been observed at the time of handling and/or processing the cheques and monitoring newly opened accounts. Primary
(Urban) Co-operative Banks (UCBs) are, therefore, advised to review and
strengthen the controls in the cheque presenting/passing and account monitoring
processes and to ensure that all procedural guidelines including preventive
measures are followed meticulously by the dealing staff/officials. Given below are some of the
preventive measures UCBs may follow in this regard. The list is only
indicative.
1.
Ensuring the use of 100% CTS – 2010 compliant cheques.
2.
Strengthening the infrastructure at the cheque handling Service
Branches and bestowing special attention on the quality of equipment and
personnel posted for CTS based clearing,
so that it is not merely a mechanical process.
3.
Ensuring that the beneficiary is KYC compliant so that the bank
has recourse to him/her as long as he/she remains a customer of the bank.
4.
Examination under UV lamp for all cheques beyond a threshold of
say, Rs.2 lakh.
5.
Checking at multiple levels, of cheques above a threshold of
say, Rs. 5 lakh.
6.
Close monitoring of credits and debits in newly opened
transaction accounts based on risk categorization.
7.
Sending an SMS alert to payer/drawer when cheques are received
in clearing.
The threshold limits
mentioned above can be reduced or increased at a later stage with the approval
of the Board depending on the volume of cheques handled by the UCBs or it’s
risk appetite.
2. In addition to the
above, UCBs may consider the following preventive measures for dealing with suspicious
or large value cheques (in relation to an account’s normal level of
operations):
a) Alerting the
customer by a phone call and getting the confirmation from the payer/drawer.
b) Contacting base
branch in case of non-home cheques.
The above may be resorted
to selectively if not found feasible to be implemented systematically.
3. It has been reported that in some cases even though the
original cheques were in the custody of the customer, cheques with the same
series had been presented and encashed by fraudsters. In this connection, UCBs
are advised to take appropriate precautionary measures to ensure that the
confidential information viz., customer name / account number / signature,
cheque serial numbers and other related information are neither compromised nor
misused either from the bank or from the vendors’ (printers, couriers etc.) side. Due care and secure
handling is also to be exercised in the movement of cheques from the time they
are tendered over the counters or dropped in the collection boxes by customers.
Yours faithfully
(Suma Varma)
Chief General Manager
Chief General Manager
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