Banks will no longer accept checks with erasure/alteration effective January 4, 2016

Oh, yes, you read it right! Starting January 4, 2015, non-acceptance of checks with erasures, alterations, or deficiencies will be fully implemented by all banks based on Philippine Clearing House Corporation (PCHC) Memo Circular 15-460. This is pursuant to the clamor and request of member banks and as endorsed by the Technical Working Committee of PCHC.

On Dated Checks Issued

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Any check that has the following condition shall no longer be eligible or acceptable for clearing, except post-dated checks bearing bank stamp specified below:

  1. shows or indicates on its face any erasure or alteration of the following, regardless of any signature or initials that appear to indicate authorization of the alteration or erasure:
    • date;
    • name of payee;
    • amount in figures;
    • amount in words;
    • signature of the Drawer/s or the Drawer’s signatory/ies;
    • account name;
    • account number;
    • check number; or
    • MICR
  2. does not indicate the following:
    • date;
    • payee;
    • amount payable in figures;
    • amount payable in words – except checks issued by banks using a check writer; or
    • signature of the Drawer/s

On Post Dated Checks (PDCs)

  • Warehoused checks (PDCs) received prior to January 4, 2016 should be stamped with “Warehoused Check – Name of the Bank” at the ‘Reserved for Other Details’ found at the back of the checks.
  • In the event the Issuer of a stamped PDC complains about any visible alteration of the check that is unauthorized, the Presenting Bank of the PDC shall be immediately held accountable for the damage caused.
  • Post dated checks that you have issued and/or received are also subject to the guidelines on non-acceptance of checks with alterations, erasures and deficiencies cited above.

In connection with the guidelines, banks have circularized various notices online and offline to inform their clients. One bank has this notice in its website:

Please be informed that effective 04 January 2016, all cheques with erasure, alteration or missing information, even if countersigned to indicate authorization of alteration or erasure, will no longer be eligible or acceptable for clearing with the exception of Post Dated Cheques (PDCs) received prior to the said effective date.

This is pursuant to Philippine Clearing House Corporation’s CHOM No. 15-460.A issued on 02 September 2015.

PCHC approved the guidelines from the final recommendation of a technical working group that includes all banking associations led by the Bankers Association of the Philippines. The “no erasures” rule is one of the security proposal included in the check truncation system (CTS) and check image clearing system (CICS) that will be implemented by the PCHC – part of the process that will shorten check clearing from three days to just one.

Even if still not effective, in preparation, bank clients are strongly urged to refrain from issuing checks with alterations effective immediately. Some banks even made it mandatory not to accept checks with  erasure, alteration or missing information.

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Download CHOM 15-460 – Non-Acceptance of Check with Erasure, Alteration and/or Deficiency here.

Let us know what you think! 🙂

2 Responses to "Banks will no longer accept checks with erasure/alteration effective January 4, 2016"

  1. This is very unfair to the holders of cheques received months or years ago. It is so hard to collect, and now that we are holding PDCs, we thought we were able to collect long outstanding dues by accepting PDCs. But then, if these cheques have alterations even if countersigned, no longer has value. Tsk tsk

    Reply

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