Current · Source: Reserve Bank of India · RBI/2009-10/503 · issued 22 Jun 2010 · ~2 min read
Quick answerRBI bans alterations/corrections on cheques cleared under Cheque Truncation System (CTS) from December 1, 2010, to curb fraud. Banks must reject such cheques upfront. Other clearing methods remain unaffected.
The rule, in the simplest words
From December 1, 2010, RBI says you cannot accept any cheque that has been changed or corrected if it is cleared through the image‑based Cheque Truncation System (CTS).
If a cheque is altered, the bank must refuse it right at the point of deposit – the collecting bank cannot send it to the clearing house for CTS.
This rule only applies to CTS cheques; cheques cleared by other methods (MICR, non‑MICR, over‑the‑counter, or direct collection) are still allowed to be altered.
All scheduled commercial banks, rural and urban co‑operative banks, and their customers must follow this rule and be informed about it.
How it plays out — a real example
Sanjay, a branch manager in Jaipur, receives a CTS cheque from a customer whose amount line has been changed. He looks at the cheque image, sees the alteration, and politely tells the customer that RBI’s rule from December 1, 2010, forbids such changes for CTS cheques, so the cheque must be returned. He explains the reason and offers to help the customer re‑issue a correct cheque, making the customer feel supported.
What changed
RBI clarified that the prohibition on alterations/corrections on cheques, first outlined in February 2010, applies only to cheques processed under image-based Cheque Truncation System (CTS). The rule takes effect from December 1, 2010, and is based on a working group's recommendations to reduce cheque fraud. Cheques under MICR, non-MICR, over-the-counter, or direct collection outside clearing houses are exempt.
What it means for you
Banks must ensure CTS cheques with any alterations are not accepted for clearing, reducing fraud risk for both customers and lenders. This mandates stricter upfront scrutiny at the collecting bank. Other cheque clearing channels remain unchanged, so banks need to differentiate processes based on clearing type.
What you must do
Update cheque acceptance procedures to reject CTS cheques with any alterations or corrections from December 1, 2010.
Train branch staff and collection teams to identify and refuse altered CTS cheques at the point of deposit.
Launch customer awareness campaigns about the new rule to ensure smooth transition and reduce disputes.
Coordinate with Indian Banks' Association and NPCI for further operational guidelines on other aspects.
Who it affects
All scheduled commercial banks including RRBs, Urban co-operative banks, State co-operative banks, District central co-operative banks, Customers issuing or depositing CTS cheques
❓ Common questions
Does this ban on alterations apply to all cheques?
No, it applies only to cheques cleared under the image-based Cheque Truncation System (CTS). Cheques cleared via MICR, non-MICR, over-the-counter, or direct collection outside clearing houses are not affected.
When does this rule take effect?
The prohibition is effective from December 1, 2010. Banks must ensure compliance from that date for CTS cheques.
What should banks do if a customer presents an altered CTS cheque?
Collecting banks must not accept such cheques for presentment in CTS from the outset. They should educate customers to avoid alterations to prevent rejection.
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/503
DPSS. CO. CHD. No. 2806/04.07.05/2009-10
June 22, 2010
The Chairman and Managing Director / Chief Executive Officer
All Scheduled Commercial Banks including RRBs /
Urban Co-operative Banks / State Co-operative Banks /
District Central Co-operative Banks
Madam / Dear Sir,
Standardisation and Enhancement of Security Features in Cheque Forms
We invite your attention to our circular DPSS.CO.CHD.No. 1832/04.07.05/2009-10 dated February 22, 2010 on the subject and specifically to Paragraph 1.8 contained in the annexure thereto on 'prohibiting alterations / corrections on cheques'.
A few references have been received from banks and members of the public seeking certain clarifications on legal validity, effective date of implementation, etc. We wish to clarify that the prescription on 'prohibiting alterations / corrections on cheques' -
has been formulated on the basis of recommendations of a working group constituted for examining the need for standardisation of cheque forms and enhancement of security features therein and after consultations with banks;
has been introduced to curtail cheque frauds on account of alterations in the various fields of cheques and to give protection to customers as well as banks;
will be applicable only for cheques cleared under the image-based Cheque Truncation System (CTS). Collecting banks should ensure, ab initio, that such cheques are not accepted for presentment in CTS.
is not applicable to cheques cleared under other clearing arrangements such as MICR clearing, non-MICR clearing, over the counter collection (for cash payment) or direct collection of cheques outside the Clearing House arrangement .
has been issued in exercise of statutory powers conferred on the Reserve Bank of India under the Payment and Settlement Systems Act, 2007. This prescription will be effective from December 1, 2010. Banks are advised to ensure that adequate care is taken to educate the customers and to create awareness among them so that the entire process is carried out in a smooth manner. As regards other aspects contained in our circular under reference, separate communication will follow from Indian Banks' Association / National Payments Corporation of India.
Yours faithfully
(Arun Pasricha)
General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/503 · issued 22 Jun 2010. The plain-English explanation above is BankPulse’s own independent summary.
Train branch staff and collection teams to identify and refuse altered CTS cheques at the point of deposit.
📜 Compliance
Update cheque acceptance procedures to reject CTS cheques with any alterations or corrections from December 1, 2010.
Launch customer awareness campaigns about the new rule to ensure smooth transition and reduce disputes.
Coordinate with Indian Banks' Association and NPCI for further operational guidelines on other aspects.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (All scheduled commercial banks including RRBs, Urban co-operative banks, State co-operative banks, District central co-operative banks, Customers issuing or depositing CTS cheques), your first concrete step on “Cheque Alterations Banned Under CTS from Dec 2010” is: “Update cheque acceptance procedures to reject CTS cheques with any alterations or corrections from December 1, 2010.” (RBI issued this 22 Jun 2010).
Circular: RBI/2009-10/503 -- Cheque Alterations Banned Under CTS from Dec 2010
Issued: 22 Jun 2010
Action required: Update cheque acceptance procedures to reject CTS cheques with any alterations or corrections from December 1, 2010.
Action required: Train branch staff and collection teams to identify and refuse altered CTS cheques at the point of deposit.
Action required: Launch customer awareness campaigns about the new rule to ensure smooth transition and reduce disputes.
Action required: Coordinate with Indian Banks' Association and NPCI for further operational guidelines on other aspects.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5741&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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