Draft of Model Policy

In view of technological progress registered by Banking Industry and enactment of the Payment and Settlement Systems Act 2007 as well setting up of (BC & SBI) Banking Codes and Standard Board of India and also in the light of NCDRC (National Consumers Dispute Redressal Commission) order in respect of delay in cheques clearing, the Reserve Bank of India vide its circular UBD (PCB) BPD No.34 / 09.39.000/2008-09 dated January 20,2009 have advised all UCBs to conform to time frame prescribed by the commission by embodying bank’s policy on collection of cheques.

Cheques Collection Policy Of Bank

  • Cheques collection and other instruments payable locally, at centres within India and abroad
  • Time norms for collection of instruments /cheques
  • Interest payment upon failure to adhere to time norms in case of outstation instruments / cheques
  • Dealing with collection of instruments / cheques lost in transit

{A-1} Local Cheques

All cheques and other Negotiable /quasi Negotiable instruments payable locally would be presented through Bankers - Clearing House, RBI, Ahmedabad. Cheques deposited at branch/es counters and in collection boxes within branch premises before the specified cut-off time (presently as under)

Week days Saturdays

Upto 4.30 P.M. 1.00 P.M. for branches commencing business at 9.00 A.M.

Upto 5.00 P.M. 1.30 P.M. for branches commencing business at 9.30 A.M.

and in collection boxes outside the branch/es premises including off-site ATMs will be presented in the next clearing cycle. Bank would give credit to customers a/cs. on the day clearing settlement takes place. Withdrawal of amount so credited would be permitted as per cheques return schedule of the URR - BCH - RBI  - Ahmedabad. Wherever applicable, facility of High Value clearing (HVC) same day credit will be extended to customers provided minimum value of cheque is Rs.One lac and paying bank is participating in HVC.

{A-2}Outstation Cheques

Since, presently bank does not have outstation branches, the instruments would be directly sent for collection to the respective drawee bank or through correspondent banks or under MAS to GSC Bank. The Bank would also avail NCS offered by RBI at centres where such collection services exist.

Branches which are connected through a centralised processing arrangements and offering ABB services will provide same day Credit/Debit to it’s customers through CBS network.

{A-3} Cheques drawn on and payable in Foreign Countries

The services of correspondent banks shall be utilized.

{A-4} Immediate Credit of local/outstation cheques instruments

Satisfactorily conducted savings/current/cash credit a/cs. opened with KYC documents, duly introduced and older than 6 months at the discretion of branch Manager, considering payee and drawer of cheque an instant credit upto an aggregate of Rs.10,000/- may be allowed provided.

  • No cheques / instruments have returned unpaid in past for “financial reason - in such a/cs.
  • Normal collection charges and out of pocket expenses are recoverable.
  • In the event of return of cheques instantly credited and where funds have not been withdrawn no interest will be charged otherwise interest applicable to clean advances shall be recovered from the date of withdrawal of funds till the funds are returned to bank not by replacing cheque for purchase / instant Credit. The returned instrument shall not be handed over till such period funds are replenished to bank.

Time norms for collection of local/outstation cheques/instrument

{B-1} For local cheques and instruments as mentioned here above against item A-1

{B-2} Cheques/Instruments sent for collection to centres within the country

  • Cheques presented at any of the four major Metro Centres (1) New Delhi (2) Mumbai (3) Kolkata (4) Chennai and payable at any of the other three centres  - Maximum period of 7 days
  • Other Metro Centres and State capitals other than those located in North Eastern States and Sikkim : Maximum period of 10 days
  • All other centres : Maximum period of 14 days

{B-3} Cheques drawn on and payable in foreign countries

Immediately after receiving credit of proceeds by Nostro a/c. of correspondent bank, considering cooling period attributable to concerned country on the “best of efforts - basis

Payment of interest for delayed collection of outstation cheques (within India)

  • The timeframe mentioned against item B-2 i to iii here above shall be applicable irrespective of whether cheques/instruments are drawn on bank’s own branches or branches of other banks
  • Interest shall be paid without any demand from customer irrespective kind of a/c. being maintained subject to the sum of such interest payable is more than Rs.5/-
  • Interest for delayed collection shall be paid at the following rates

a) At saving bank rate for the period of delay beyond 7-10-14 days as the case may be occurred in collection of outstation cheques

b) Where the delay is beyond 14 days interest will be paid at the rate applicable to Term Deposit for the respective period.

c) In case of extra ordinary delay i.e. delay exceeding 90 days interest will be paid at the rate 2% above the corresponding Term Deposit rate

d) When the proceeds of cheque under collection was to be credited to an Overdraft / Cash Credit/Loan a/c. of the customer, interest will be paid at the rate applicable to respective a/c. In case of extra ordinary delay, interest will be paid at the rate 2% above the basic applicable rate being charged to borrower.

When an instrument sent for collection is lost in transit

An instrument accepted for collection is lost in transit or in the clearing process or at the paying bank’s branch, the bank will immediately on receiving such information of loss or knowing the facts, bring the same to the notice of the a/c. holder so that he/she can inform the drawer to record stop payment and also take care that cheques, if any, issued by him / her are not dishonored due to non-credit of the amount of the lost instruments.

a) When intimation regarding loss of instrument is conveyed to the customer beyond the time limit stipulated here above vide item C (a to d) for collection 7/10/14 days as the case may be, interest will be paid for the period exceeding the stipulated collection period at the rates specified here above.

b) In addition, bank will pay interest on cheque amount for a further period of 15 days at Savings Bank rate anticipating further delay in ostentation of duplicate cheque/instrument and collection thereof

c) In the event, the duplicate instrument is to be obtained from a bank/institution which charges fee for issuance, the bank would pay reasonable charges to the customer that he/she may incur on production of receipt

{A-5} Purchase of local / outstation cheques / instruments

At the sole discretion of Banks higher management, within RBI directives from time to time and subject to banks - lending policy and ruling interest / exchange rates, bank may selectively allow such facility to its - customers only who are holding bank’s shares.

Bank’s non liability to compensate customers for delayed Credit ?Force Majeure

In the event of occurrence of some unforeseen circumstances (Force Majeure) including but not limited to civic commotion riots, mutiny, rebellion, sabotage, malicious terrorism, an act of foreign enemy hostilities, lock out, strike, Labour unrest / disturbances, accident, fire, earthquake, volcanic eruption and such natural disasters or other “Acts of God, war, damage to bank’s equipments, communication network, break down in computer system or its correspondent, RBI and absence of usual means of communication or all types of transportation etc. beyond control of the bank / correspondent / RBI, which prevents bank from performing its obligations within the specifically defined service delivery norms under this policy.