Starting next fiscal, rules guiding financial instruments like cheques, pay orders and demand drafts are going to see big change. With effect from April 01, 2012, a cheque or demand draft will remain encashable only for a period of three months instead of six months now.

Banking and monetary regulator Reserve Bank of India has said that the reason behind reducing the validity period of these financial instruments is to bring a check on the increasingly prevelant misuse taking place.

"The Reserve Bank is satisfied that in public interest and in the interest of banking policy, it is necessary to reduce the period within which cheques/drafts/pay orders/banker's cheques are presented for payment from six months to three months from the date of such instrument," quoted a notification released by the apex bank.

Also, now account payee cheques will not be credited to any other entity other than the payee mentioned.

Apart from that, new rules are to come for fixed deposits too. In case of fixed deposits having joint holding, redemption of the deposit would require joint signatures of both account holders. The stringent attitude of joint signatures should however be kept in case of premature closure of the account. In case of withdrawal on maturity, the apex bank has said that one signature should also be taken into consideration.