(Local / outstation cheques for Deposit / Loan accounts of individuals)

Policy Guidelines

1. Objectives:
This cheque collection policy is a reflection of the Bank’s ongoing efforts to provide better service to the customers and set higher standards for performance. The policy is based on principles of transparency and fairness in the treatment of customers. The Bank is committed to increased use of technology to provide quick collection services to its customers. The policy covers the following aspects:

(A) Collection of cheques and other instruments payable locally, at centres within India and abroad.
(B) Immediate credit of outstation/local cheques to deposit accounts of individuals.
(C) Time frame for collection of local/outstation instruments.
(D) Interest payment for delayed collection.
(E) Cheques / instruments lost in transit / in clearing process.

2. Collection of cheques and other instruments payable locally, at centres within India and abroad.

2.1 Local Cheques
(a) All cheques and other Negotiable Instruments payable locally would be presented through the clearing system if prevailing at the centre. Cheques deposited at branch counters before the specified cut-off time (upto 10.15 am) will be presented for clearing on the same day. Cheques deposited after the cut-off time will be presented in the next clearing cycle.

(b) Where High Value Clearing (same day credit) facility is available the instruments accepted at the counters upto 10.15 am will be included for same day clearing and credit will also be afforded on the same day. The high value instruments will cover cheque value for rupees one lac and above.

(c) The credit effect to the customer account will be given on the same day as per cheque return schedule of the clearinghouse and withdrawal of amounts so credited would be permitted on the same day or maximum within an hour of commencement of business of next working day subject to usual safeguard.

(d) 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 endeavour to credit the proceeds at the earliest on realization and to allow drawal to the customer there after.

(e) Negotiation of local cheques/instruments will not be encouraged.

(f) No charges will be levied for local collection of cheques/instruments which are collected through a normal clearing process.
(g) Actual cost incurred for collection of local cheques not collected through clearing will be levied, irrespective of the amount of cheques.
2.2 Outstation Cheques
Cheques drawn on other banks at outstation centres in India will normally be collected through bank’s branches at those centres. Where the bank does not have a branch of its own, the instrument would be directly sent for collection to the drawee bank or collected through a correspondent bank.

Cheques drawn on bank’s own branches at outstation centres will be collected using the inter-branch arrangements in vogue. Branches will provide same day credit to satisfactorily conducted accounts (defined hereafter in the policy) in respect of instruments drawn on any of its branches.

2.3 Cheques payable in Foreign Countries
Cheques payable at foreign centres will be collected by utilizing service of any nationalized / private sector bank to which the bank maintains relation.

3. Immediate Credit of Local / Outstation Cheques / Instruments:
At the specific request of a customer or as per prior arrangement immediate credit of local / outstation cheques / instruments up to the aggregate value of Rs7500/- (Rupees Seven Thousand Five Hundred) only tendered for collection by customer will be offered in Savings Bank / Current / Cash Credit / Overdraft accounts of the customer having satisfactorily conducted accounts and without any separate stipulation of minimum balance in the account.

For the purpose of this Policy, a satisfactorily conducted account shall be the one:
a) Opened at least six months earlier and complying with KYC norms.
b) Conduct of which has been satisfactory and bank has not noticed any irregular dealings.
c) Where no cheques / instruments for which immediate credit was afforded returned unpaid for financial reasons.
d) Where the bank has not experienced any difficulty in recovery of any amount advanced in the past including cheques returned after giving immediate credit.
Provided that if a cheque/instrument for which immediate credit has been afforded is returned unpaid, the Bank shall recover interest at clean overdraft rate for the period for which the Bank remained out of funds and also cheque return charges subject to the following:
a) Bank will charge interest from the date of credit of proceeds of the cheque in the account till reimbursement of money to the Bank.

b) Where the cheque is credited to a Savings Bank account, such credits will not be reckoned for interest purposes if the cheque is returned.

c) If proceeds are credited in an overdraft/loan account, interest would be recovered at applicable rate/clean overdraft rate, whichever is higher, on the amount of returned cheque/instrument.

4. Time Frame for Collection of Local / Outstation Cheques / Instruments:
(a) For local cheques presented in clearing credit or over the counter will be afforded as on the date of settlement of funds in clearing or receipt of the realized proceed and the account holder will be allowed to withdraw funds as per clause no.- 2.1(c) & (d).

(b) Cheques / Instruments presented in high value clearing (with the minimum value of Rupees one lac) shall be credited on the same day (applicable only in areas covered by high value / same day clearing).

(c) Since the Bank has a limited network of Branches and has to depend predominantly on correspondent Banks / Drawee Banks for collection of cheques and other instruments drawn on other Banks within the country the credit effect of the instrument will be given only upon realization.

The cheques / instruments drawn Bank’s own Branches will be credited within a maximum period of seven days.

(d) There will not be any time limit for collection of cheques / instruments payable in foreign countries as Bank will not be in a position to ensure timely collection from correspondent Banks as practices for collection vary from country to country. However, Bank will pursue for expeditious realization of cheques/instruments sent for collection through effective follow up.

5. Payment of Interest for delayed Collection of Outstation Cheques:
It is the responsibility of Bank to collect the instruments within the time frame prescribed for the purpose and to compensate the customers for delays due to non-adherence to time schedule. Following guidelines are, therefore, laid down for cheques / instruments payable in India:
a) Interest shall be payable without any claim from the customers, if the Instruments are not realized / proceeds credited to the customer's accounts within the period as mentioned in paragraph 4 above.
b) Where the delay is beyond 14 days interest will be paid at the rate applicable to for term deposit for the respective period.
c) In case of extraordinary delay, i.e. delays exceeding 90 days interest will be paid at the rate of 1% above the corresponding Term Deposit rate.
d) In the event the proceeds of cheque under collection were to be credited to an overdraft/loan account of the customer, interest will be paid at the rate applicable to the loan account. For extraordinary delays, interest will be paid at the rate of 1% above the rate applicable to the loan account.
e) Such interest shall be payable with a minimum of Rs. 5/- even if the interest calculated works out to less than Rs. 5/-.

It may be noted that interest payment as given above would be applicable only for instruments sent for collection within India.

6. Cheques / Instruments lost in transit / in clearing process or at paying bank’s branch:
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.
In line with the compensation policy of the bank the bank will compensate the accountholder in respect of instruments lost in transit in the following way:
a) In case intimation regarding loss of instrument is conveyed to the customer beyond the time limit stipulated for collection interest will be paid for the period exceeding the stipulated collection period at the rates specified above.
b) In addition, bank will pay interest on the amount of the cheque for a further period of 15 days at Savings Bank rate to provide for likely further delay in obtaining duplicate cheque/instrument and collection thereof.
c) The bank would also compensate the customer for any reasonable charges he/she incurs in getting duplicate cheque/instrument upon production of receipt, in the event the instrument is to be obtained from a bank/ institution who would charge a fee for issue of duplicate instrument.

7. Force Majeure
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.

8. Effective Date of the Policy
The policy will come into effect with effect from 01-01-2009 until further decision.