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Cheque Return Memos Must Be Signed or Initialled

Current · Source: Reserve Bank of India · RBI/2011-12/121 · issued 25 Jul 2011 · ~1 min read
Quick answerRBI mandates that all Cheque Return Memos must be signed or initialled by bank officials, even if computer-generated. This is critical for legal recourse and compliance with URRBCH rules under the Payment and Settlement Systems Act.
The rule, in the simplest words
How it plays out — a real example

Rita, a cheque‑return officer in Indore, receives a returned cheque, prints the computer‑generated return memo, signs it herself, and then forwards it to the clearing house, making sure the bank follows the RBI’s signing rule.

What changed

RBI reiterated that Cheque Return Memos must be signed or initialled, as per Rule 6 of URRBCH. Some banks had stopped signing computer-generated memos, which RBI now clarifies is a violation. The circular reinforces existing instructions from September 2010.

What it means for you

Banks must ensure every Cheque Return Memo carries a manual signature or initial, regardless of being computer-generated. Non-compliance could weaken legal cases involving dishonoured cheques and attract regulatory action. This affects all scheduled commercial banks, RRBs, and cooperative banks.

What you must do

Who it affects

All Scheduled Commercial Banks including RRBs, Urban Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks

❓ Common questions

Why is signing the Cheque Return Memo important?

The signed memo serves as a critical document for legal action in case of cheque dishonour. Without a signature, the validity of the return reason may be challenged in court.

Does this apply to computer-generated memos?

Yes. RBI explicitly states that computer-generated memos must also be signed or initialled. The absence of a signature is a violation of URRBCH rules.

What are the consequences of non-compliance?

Non-compliance is a violation of instructions under the Payment and Settlement Systems Act, 2007, and could lead to regulatory action against the bank.

📜 Read the original circular — full text as issued by RBI
RBI/2011-12/121 DPSS.CO.CHD.No. 120 / 03.06.01 / 2011-12 July 25, 2011 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, Dishonour / Return of Cheques - Need to Sign / Initial the Cheque Return Memo Please refer to our circular DPSS. CO. CHD. No. 485 / 03.06.01 / 2010-11 dated September 1, 2010 on Dishonour / Return of Cheques - Need to Mention the 'Date of Return' in the Cheque Return Memo, wherein citing the criticality of the document in case of recourse to legal action, it has been indicated that instruments returned unpaid should have a signed / initialed objection slip on which a definite and valid reason for refusing payment must be stated, as prescribed in Rule 6 of the  Uniform Regulations and Rules for Bankers’ Clearing Houses (URRBCH). Certain instances of banks not signing the Cheque Return Memos stating that the Memos are computer generated and therefore no signature is necessary, have been brought to our notice. Such practices are violation of instructions contained in Uniform Regulations and Rules for Bankers’ Clearing Houses (URRBCH) which is issued under Payment and Settlement Systems Act 2007 read with Payment and Settlement Systems Regulations 2008. Banks are, therefore, advised to strictly adhere to the instructions and sign/initial the Cheque Return Memos as laid down in Rule 6 of URRBCH. Yours faithfully, (Pankaj Ekka) Deputy General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/121 · issued 25 Jul 2011. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
🏦 Branch Manager
  • Train branch staff and clearing departments on the mandatory signing requirement under URRBCH Rule 6.
  • Communicate this directive to all branches and clearing houses immediately.
📜 Compliance
  • Update internal processes to ensure all Cheque Return Memos are signed or initialled by an authorised officer.
  • Audit current practices to identify and correct any instances of unsigned return memos.
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), your first concrete step on “Cheque Return Memos Must Be Signed or Initialled” is: “Update internal processes to ensure all Cheque Return Memos are signed or initialled by an authorised officer.” (RBI issued this 25 Jul 2011).

  1. Circular: RBI/2011-12/121 -- Cheque Return Memos Must Be Signed or Initialled
  2. Issued: 25 Jul 2011
  3. Action required: Update internal processes to ensure all Cheque Return Memos are signed or initialled by an authorised officer.
  4. Action required: Train branch staff and clearing departments on the mandatory signing requirement under URRBCH Rule 6.
  5. Action required: Audit current practices to identify and correct any instances of unsigned return memos.
  6. Action required: Communicate this directive to all branches and clearing houses immediately.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. 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.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6625&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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