Banking and monetary regulator Reserve Bank of India has urged all non banking finance companies (NBFCs) to gradually bring a stop to usage of cheques in banking transactions.

The idea behind this step is to reduce the usage of paper transaction modes and thus aid in ecology conservation.

As a part of the green initiatives of the government, many financial institutions have been suggested to make better and effective utilisation of resources.

"NBFCs are therefore, requested to take proactive steps in this regard by increasing the use of electronic payment systems, elimination of post-dated cheques and gradual phase-out of cheques in their day to day business transactions," the RBI said.

This step will also aid in better and accurate delivery of services to the customer, said the apex bank.