Home › Circulars › RBI/2011-12/250

Mandatory Account Payee Crossing for Demand Drafts of Rs 20,000 and Above

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2011-12/250 · issued 04 Nov 2011 · ~2 min read
Quick answerRBI mandates that all demand drafts of Rs 20,000 and above must be issued with account payee crossing to curb misuse for cash-like transfers. This ensures such instruments are credited only to the payee's bank account, not encashed over the counter.
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What changed

RBI has directed all scheduled commercial banks (excluding RRBs) to ensure that demand drafts of Rs 20,000 and above are issued invariably with account payee crossing. Previously, banks could issue such drafts without crossing, which allowed unscrupulous elements to use them as a substitute for cash settlements.

What it means for you

Banks must update their DD issuance systems and procedures to enforce account payee crossing for all drafts of Rs 20,000 and above. This move tightens the payment trail, reduces money laundering risks, and aligns with the existing rule that account payee instruments must be credited to the payee's account. Lenders should expect increased operational compliance but lower fraud exposure.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

All scheduled commercial banks (excluding RRBs), Bank treasury and operations departments, Branch managers and cash handling staff, Customers issuing demand drafts of Rs 20,000 or more

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Does this apply to demand drafts below Rs 20,000?

No, the RBI directive specifically covers demand drafts of Rs 20,000 and above. Lower-value drafts are not affected by this circular.

What happens if a bank issues a DD without crossing for Rs 20,000 or more?

That would be a violation of RBI instructions. Banks must ensure compliance to avoid regulatory action. The circular does not specify penalties, but non-compliance could invite supervisory scrutiny.

Are regional rural banks (RRBs) covered by this circular?

No, the circular explicitly excludes RRBs. It is addressed to all scheduled commercial banks other than RRBs.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1417: DBOD.BP.BC.No.49/21.01.001/2011-12 — "Issue of Demand Drafts for Rs.20,000/- and above" dated November 4, 2011”
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/250 DBOD.BP.BC. No. 49/21.01.001/2011-12 November 4, 2011 The Chairmen / Chief Executives of All Scheduled Commercial Banks (excluding RRBs) Dear Sir, Issue of Demand Drafts for Rs. 20,000/- and above As banks are aware, instruments with account payee crossing are required to be credited to the payee's account and not paid in cash over the counter. However, some unscrupulous elements use demand drafts without any crossing for transfer of money as an alternative to settlement through cash. 2. In order to address the regulatory concerns that have arisen in this context, banks are advised to ensure that demand drafts of Rs. 20,000/- and above are issued invariably with account payee crossing. Yours faithfully, (Deepak Singhal) Chief General Manager -In - Charge.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/250 · issued 04 Nov 2011. The plain-English explanation above is BankPulse’s own independent summary.
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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6802&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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