For Quick Alerts
For Daily Alerts

    New Demand Draft Rules Apply To Check Money Laundering


    In a bid to check illicit financial transactions and money laundering, RBI has new guidelines in relation to issuance of demand draft. On Thursday, the apex bank has asked banks to add the purchaser's name on the face of the DD, pay order and banker's cheque. Conequently, the changes have been made in the KYC or Know Your Customer norms and they shall come into effect from September 15.

    New Demand Draft Rules Apply To Check Money Laundering

    The circular issued to all banks by the RBI stated, "In order to address the concerns arising out of the anonymity provided by payments through demand drafts and their possible misuse for money laundering, it has been decided that the name of the purchaser be incorporated on the face of the demand draft, pay order, banker's cheques, etc., by the issuing bank."

    DD or demand drafts are instruments in which the payment is made by the drawee bank when the instrument is presented by the payee. Though with the introduction of new online payment modes, this instrument has lost much of relevance but still the instrument finds its place when it comes to various admissions and job applications.

    As an aggressive step to minimize money laundering activities, only debit transactions to the customer's account is allowed in case the amount in the transaction is over Rs. 50,000.

    Read more about: rbi demand draft
    Story first published: Friday, July 13, 2018, 14:36 [IST]
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more