Banking and monetary regulator Reserve Bank of India has directed banks for limiting issue of demand drafts (DD) against cash deposit for amounts less than Rs 50,000 only.
Several cases have come to the notice of RBI which have issued DDs of amount more than Rs 50,000 and above against cash rather than the amount getting debited from the customer's account.
"In the current scenario where the integrity of the financial system, in general, and the banking channels, in particular, is of paramount importance, breach of these guidelines is a matter of serious regulatory concern in view of the wide ranging ramifications," the RBI said.
The apex bank has said that demand drafts, mail transfers, telegraphic transfers and travellers cheques for Rs 50,000 and above should only be addressed by banks against subsequent debit from the account of the customer.
Sale of gold, silver, platinum also pertains to the same guideline.