This policy is framed in view RBI Circular to improve efficiencies in collection of cheques and other instruments and is based on the Model Policy made by Indian bank's association. This policy document covers the following aspects:
Under this policy, prepaid instruments like Demand Drafts, Interest / Dividend warrants shall be treated on par with cheques.
All cheques etc payable locally would be presented through the clearing system prevailing at the Branch location. Cheques deposited at branch counters and in collection boxes within the branch premises before the specified cut-off time (11am for high value instruments and 4.30pm for all other) will be presented for clearing on the same day. Cheques deposited after the cut-off time and in collection boxes outside the branch premises (including off-site ATMs) will be presented in the immediate next clearing cycle.
Bank would give credit to the customer account on the same day, when clearing settlement takes place. Withdrawal of amounts so credited would be permitted as per the cheque return schedule of the clearing-house of respective Branch locations.
Wherever applicable, the facility of high-value clearing (same day credit) will be extended to customers, as per the regulations of the respective clearing-houses.
Bank branches situated at centres where no clearing house exists, would present local cheques on drawee banks across the counter and it would be the bank’s endeavor to credit the proceeds at the earliest.
Cheques drawn on other banks at outstation centres will normally be collected through bank branch and /or at branches of other correspondent bank's as per the arrangement at those centres. Where the bank does not have a branch/or correspondent arrangement of its own, the instrument would be directly sent for collection to the drawee bank or collected through a correspondent bank.
The bank would also use the National Clearing services offered by the Reserve Bank of India at centres where such collection services exist.
Cheques drawn on bank’s own branches at outstation centres will be collected through our branches. The Bank will provide its customers same day credit in respect of outstation instruments drawn on any of its branches in the CBS network.
The Bank also to participate in ‘Speed-Clearing’ i.e. a separate clearing for collection of outstation cheques drawn on CBS-enabled branches. Under this arrangement, the depositor is given the benefit of funds the same day for all cheques drawn on CBS branches of other banks, by treating such cheques as ‘local’ cheques without subjecting them to any additional charges. All our cheques be branded / stamped – as ‘CBS’ to enable customers and collecting bank branches to be aware of such status.
All the outstation cheques drawn on non-CBS branches (hereinafter referred to as ‘outstation cheques’) received for collection during the counter hours would be processed and dispatched on the same day.
Cheques payable at centres in foreign countries, where the bank has branch operations (or banking operations through a subsidiary, etc.) will be collected through that office. The services of correspondent banks will be utilized in country/centres where the correspondent has presence.
Cheques drawn on foreign banks at centres where the bank or its correspondents do not have direct presence will be sent direct to the drawee bank with instructions to credit proceeds to the respective Nostro Account of the bank maintained with one of the correspondent banks.
The bank will consider providing immediate credit for outstation cheques / instruments up to the aggregate value of Rs.15,000/- tendered for collection by individual account holders subject to satisfactory conduct of such accounts for a period not less than 6 months. Immediate credit will be provided against such collection instruments at the specific request of the customer or as per prior arrangement. The facility of immediate credit would also be made available in respect of local cheques at centres where no formal clearing-house exists.
The facility of immediate credit will be offered on Savings Bank / Current / Cash Credit Accounts of the individual account holders. For extending this facility there will not be any separate stipulation of minimum balance in the account.
In the event of dishonor of cheque against which immediate credit was provided, interest shall be recoverable from the customer for the period the bank remained out of funds at the rate applicable for overdraft limits sanctioned for individual customers.
For the purpose of this Policy, a satisfactorily conducted account shall be the one, opened at least six months earlier and complying with KYC norms and:
Bank shall levy normal collection charges and out of pocket expenses while providing immediate credit against outstation cheques tendered for collection. Exchange charges applicable for cheque purchase will not, however be charged.
Bank may, at its discretion, purchase local/outstation cheque tendered for collection at the specific request of the customer or as per prior arrangement. Besides satisfactory conduct of account, the standing of the drawer of the cheque will also be a factor considered while purchasing the cheque.
For local cheques presented in clearing credit will be afforded as on the date of settlement of funds in clearing and the account holder will be allowed to withdraw funds as per return clearing norms in vogue.
Cheques / Instruments will be presented in high value clearing (with the minimum value of Rs.1 lac presently and drawn payable within the specified High Value Clearing Zone), when they are received at our Bank counters, upto 1 hour in advance of the HV Presentation time limit. (Presently 11 am since the time limit is 12 noon) The customer’s accounts shall be credited on the same day (applicable only in areas covered by high value / same day clearing) as soon as the HV Return Clearing is settled by Clearing House. Presently, there is no High Value Clearing on Saturdays. The High Value Clearing arrangement to continue up to October 2009 which will be completely phased out w.e.f. 01.11.2009 as per Mumbai Clearing House road map.
For cheques and other instruments sent for collection to centres within the country the following time norms shall be applied:
Cheques drawn on foreign countries: Such instruments are accepted for collection on the ‘best of efforts’ basis. Bank have entered into a specific collection arrangement with its correspondent bank for speedy collection of instrument drawn in USD.
Bank would give credit to the party on credit of proceeds to the bank’s Nostro Account with the correspondent bank after taking into account cooling periods as applicable to the countries concerned.
The cooling period for USD cheques would be 10 days after the date of credit in the Nostro account and 15 days for instruments drawn in currency other than USD.
The above time norms are applicable irrespective of whether cheques/instruments are drawn on the bank’s own branches or branches of other banks.
The bank will pay interest to its customer on the amount of collection instruments, in case there is delay in giving credit beyond the time period mentioned above.
Such interest shall be paid without any demand from customers in all types of accounts.
There shall be no distinction between instruments drawn on the bank’s own branches or on other banks for the purpose of payment of interest on delayed collection.
Interest for delayed collection shall be paid at the following rates:
It may be noted that interest payment as given above would be applicable only for instruments sent for collection within India.
In the event a cheque or an instrument accepted for collection is lost in transit or in the clearing process or at the paying bank’s branch, the bank shall immediately on coming to know of the loss, bring the same to the notice of the accountholder so that the accountholder can inform the drawer to record stop payment and also take care that cheques, if any, issued by him / her are not dishonoured due to non-credit of the amount of the lost cheques / instruments. The bank would provide all assistance to the customer to obtain a duplicate instrument from the drawer of the cheque.
The bank will compensate the accountholder in respect of instruments lost in transit in the following way:
The bank shall not be liable to compensate customers for delayed credit if some unforeseen event {including but not limited to civil commotion, sabotage, lockout, strike or other labour disturbances, accident, fires, natural disasters or other “Acts of God”, war, damage to the bank’s facilities or of its correspondent bank(s), absence of the usual means of communication or all types of transportation, etc} beyond the control of the bank prevents it from performing its obligations within the specified service delivery parameters.
Link failure is an operational disruption and in situations of Link/connectivity/Network failure issues, the RBI instructions vide circular No. DPSS/1749 dated 02.04.09 should be followed as detailed below.