Cheque: 11 Revision Flashcards

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According to RBI mandates,
what is the fixed validity period of a cheque calculated from the date printed on the instrument?
Direct Answer
3 months
If there is a discrepancy between the amount written in words and the amount written in figures on a cheque, which legal rule applies?
Direct Answer
The amount in words overrides the amount in figures
Which specific legislation empowers the Reserve Bank of India to regulate payment systems, including cheque clearing rules?
Direct Answer
The Payment & Settlement Systems Act, 2007
What defines a "Post-Dated Cheque" (PDC)?
Direct Answer
It is dated for a future date and is payable only on or after that date
Which type of cheque is payable specifically to the payee named on the instrument or to a person to whom it has been endorsed?
Direct Answer
Order Cheque
What is the primary operational implication of the "One National CTS Grid" for cheque clearing in India?
Direct Answer
Every CTS-2010 cheque is treated as a local cheque regardless of location
Prior to the implementation of the National CTS Grid, India's clearing infrastructure was divided into three separate grids based in Delhi, Mumbai, and Chennai.
Direct Answer
True
What is the primary purpose of the "Positive Pay System" (PPS) in the context of cheque clearing?
Direct Answer
To provide a fraud-prevention mechanism where the drawer pre-confirms cheque details
Banks have the discretion to make the Positive Pay System (PPS) mandatory for cheques exceeding which value?
Direct Answer
₹5 lakh
Which magnetic ink feature on a cheque contains the essential data regarding the bank, branch, and cheque number required for automated processing?
Direct Answer
MICR Line

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Under the Continuous Clearing framework, how frequently are the "Settlement Batches" run by the Clearing House to finalize the net positions of participating banks?
Direct Answer
Hourly, starting from 11:00 AM up to 7:00 PM