Modern day banking has brought its own conveniences. Can you imagine a life without ATMs or internet banking? Or, for that matter, the cheque drop-box?

But this handiness has as negative side, too. The experience of a customer, call him Om , recounted in the 2010-11 Annual Report of the Banking Ombudsman released recently is an example.

Om deposited a cheque in the drop box of his banker.

Realising that the cheque was taking forever to be credited to his account, he approached the bank.

He received a nasty surprised when the bank told him that they never received the cheque!

Enquiries by his banker showed that the cheque had been paid to some other bank, a clear case of fraud.

Someone had cleverly picked up Om's cheque from the drop-box, used his name to open an account in some other bank, presented this cheque for payment into that account and withdrawn it as soon as it was credited.

Happens often

This is not an isolated case of drop-box related thefts. In March 2010 two men were arrested in Delhi for allegedly siphoning off Rs 1.5 crore by stealing cheques from drop-boxes and encashing them in the manner mentioned above.

Such frauds make us think twice before we drop a cheque next time. More so, if it is a high-value cheque.

Besides, the anxiety does not end if your banker has discovered the fraud.

In Om's case, both his banker, from whose drop-box the cheque was stolen and the other banker, who allowed the fraudster to open an account could not arrive at a settlement, lengthening his wait for the money that was rightfully his.

On referral to the Banking Ombudsman, it was observed that there was laxity on the part of the bank that opened the new account - in monitoring the account and in KYC verification.

The account holder was not traceable. Hence, an award was passed against the other bank for payment of the amount to the complainant.

Know your rights

In such circumstances, a safer option would be to go back to the old way of tendering the cheque at the counter, never mind the wait.

However, there have been reported instances of banks refusing to take cheques presented at the counter and compelling customers to drop the cheques in the boxes.

If your banker too tells you that, remember that you have a right to contest him.

The RBI has mandated that banks, under no circumstances, should refuse to accept cheques over the counter and that they must give proper acknowledgement when received at the counter.

In fact, the central bank has also mandated that banks must display this fact in writing over the cheque drop-box to build customer awareness.

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