Keeping in view the technological progress in payment and settlement systems and the qualitative changes in operational systems and processes that have been undertaken by a number of banks, the Reserve Bank of India had, with effect from 1st November 2004, withdrawn its earlier instructions to commercial banks on (i) Immediate Credit of local/outstation cheques, (ii) Time Frame for Collection of Local / Outstation Instruments and (iii) Interest Payment for Delayed Collection. The withdrawal of these mandatory guidelines was expected to enable market forces of competition to come into play to improve efficiencies in collection of cheques and other instruments. This Policy on Collection of Cheques / Instruments of the Bank is a reflection of our on-going efforts to provide better service to our 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. This Policy document covers the following aspects:

1.  Collection  of  cheques  and other instruments payable locally, at  centers within India and abroad. 
2.  Our commitment regarding time norms for collection of instruments.
3.  Policy on payment of interest in cases where the bank fails to meet time   norms for realization of proceeds of outstation instruments.
4.  Our policy on dealing with collection instruments lost in transit.

 2. Arrangements for Collection :

2.1.  Local Cheques
All  cheques   and  other  Negotiable  Instruments payable locally   would  be   presented through  the  clearing  system  prevailing at   the center.  Cheques  deposited   at branch counters  and in  collection boxes within the branch premises before the specified cut-off time,   which   will  be displayed by respective branches, will be presented for clearing on the  same  day.  Cheques  deposited  after  the  cut-off  time,  which  will be displayed by respective  branches,  and in  collection boxes outside the branch premises including off- site  ATMs   will   be  presented In the  next clearing cycle. As a policy, Bank would  give credit  to  the  customer’s  account  on   the   day, clearing   settlement        takes   place. Withdrawal  of amounts  so  credited    would  be   permitted  as  per  the  cheque  return schedule   of  the  clearinghouse.  Wherever   applicable, facility  of high-value   clearing (same day credit) will be extended to customers. 

Bank branches situated at centers 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. 

2.2. Outstation Cheques

Cheques drawn on other banks at outstation centers will normally be collected through Bank’s branches at those centers.  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.  The Bank would also use the National Clearing services/Speed Clearing offered by the Reserve Bank of India at centers where such collection services exist

In respect of outstation instruments drawn on any of the branches of the Bank credit will be given on the same day (Collection charges at the prevailing service charges tariff will be applicable)

2.3 Cheques payable in Foreign Countries
Cheques payable at foreign centers 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/centers where the correspondent  has presence.  Cheques    drawn   on   foreign  banks  at  centers  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. Owing to different practices, systems, different laws,    different   lock in  periods   in   different   countries,  these  services    cannot   be standardized.   However,   the   credit will be passed on within 7 days if the proceeds are cleared and confirmed and the rate of exchange will be the rate prevailing on the date of conversion. 

2.4 Immediate Credit of Local / Outstation Cheques / Instruments
Branches / extension counters of the Bank will consider providing immediate credit for outstation cheques / instruments up to the aggregate value of Rs 15000/- in case of Rural and Semi-Urban branches and up to Rs. 25000/- in case of Urban and Metropolitan branches 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 for specific period. The facility of immediate credit would also be made available in respect of local cheques at centers where no formal clearinghouse exists.

The facility of immediate credit will be offered on Savings Bank / Current / Cash Credit Accounts of the customers.  For extending this facility there will not be any separate stipulation of minimum balance in the account.

Under this policy, prepaid instruments like Interest / Dividend warrants shall be treated on par with cheques. 

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 [PLR+4%] sanctioned for individual customers.

For the purpose of this Policy, a satisfactorily conducted account shall be the one

1] Opened at least six months earlier and complying with KYC norms.
2] Conduct  of  which  has been satisfactory  and  bank  has  not  noticed  any  irregular dealings.
3] Where  no  Cheques  /  instruments  for  which   immediate  credit was afforded returned unpaid for financial reasons
4] Where  the  Bank  has  not  experienced  any  difficulty  in  recovery  of  any amount  advanced in the past including cheques returned after giving  immediate credit.

Bank shall levy normal collection charges and out of pocket expenses as per rules. while providing immediate credit against outstation instruments tendered for collection. Service charges applicable for cheque purchase will not, however be charged.

2.5 Purchase of local/outstation cheques

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.

3. Time Frame for Collection of Local / Outstation Cheques / Instruments:

Generally, cheques will be accepted for collection for 1 hour after business hours.

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 presented in high value clearing (with the minimum value of Rs.1 lac) shall be credited on the same day (applicable only in areas covered by high value / same day clearing and in respect of Cheques deposited within prescribed hours). 

For cheques and other instruments sent for collection to centers within the country the following time norms shall be applied:

1. Cheques presented at any of the four major Metro Centers  (New Delhi, Mumbai, Kolkata and Chennai) and payable at any of the other three centers: Maximum period of 7 days.
2. Metro Centers and State Capitals (other than those of North Eastern States and Sikkim):-  Maximum period of 7 days.
3.  In all other Centres:: Maximum period of 14 days.
4. Cheques drawn on foreign countries:  Such instruments are accepted for collection on the ‘best of efforts’ basis. Bank may enter into specific collection arrangement with its correspondent bank for speedy collection of such instrument. 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    above     time   norms    are     applicable    irrespective    of   whether   Cheques  / instruments are drawn on the Bank’s own branches or branches of other banks.

3.1  Cheques   drawn    on   any  of   Banks  own  core   banking  enabled   branches  and      deposited   within   prescribed   hours    for  transaction  at  any    of     core        banking enabled  branch  of  the  Bank   (for   credit   of  home   branch a/c) –   Generally,       the   effect   will   be   given   the   same  day.  Service  Charges  will  be   recovered   as   per rules.

4.  Payment of Interest for delayed Collection of Outstation Cheques :

As part of the Compensation Policy of the Bank, 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:

1] At Savings Bank rate for the period of delay, beyond 7/10/14 days as the case may  be,  is  up to 45 days in collection of outstation cheques.

2] Where the delay is beyond 45 days interest will be paid at  the  rate  applicable  to Savings Deposit+1.5 %. 3] In case of extraordinary delay, i.e.  delays exceeding 90 days interest  will be paid at the rate  of2% above the rate as stipulated under para  4.2 above.
4] In  the  event  the  proceeds  of  cheque  under  collection   was   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  2%  above  the  rate  applicable to the loan   account.
5] Interest will be paid if the same works out to Rs.5/- and more and will be  credited to the account along  with proceeds of delayed outstation  Cheques

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

5. Cheques / Instruments lost in transit / in clearing process or at paying bank’s branch / cheques dishonored :

5.1 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 dishonored 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.

5.2 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:

1]  In case intimation regarding loss of instrument is conveyed to the customer beyond the time limit stipulated 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 above.

2]  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.

3] The   Bank   would   also   compensate   the  customer  for  any  reasonable   charges
(maximum Rs. 100/-) he/she incurs in stopping the payment of Cheque, 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.

4] Bank  will  bear all the cost for obtaining duplicate instrument when   a Cheque,  which has  been    discounted, is  lost.  But   the  customer  will  assist   in   obtaining  duplicate instrument. His liability under Negotiable Instrument Act will not be extinguished till  Bank receives the proceeds of Cheque.

6. 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, 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 beyond the control of the  Bank   prevents   it   from performing its  obligations  within  the specified  service delivery parameters.

 7. Charging of Interest on cheques returned unpaid where Instant Credit was given :

If,    the    cheques   lodged   for    collection    in   clearing  /   sent    for   collection  are dishonored, the  same  will  be  returned/dispatched  to  the  customer   within  24   hours. Service charges   will  be recovered as per rules. 

If a cheque sent for collection for which immediate credit was provided by  the  Bank  is  returned unpaid, the value of the cheque will be immediately debited to the account . The customer will not be charged any interest from  the date immediate credit was given to the date of return of the instrument  unless  the  Bank  had  remained  out of funds on account of withdrawal of  funds.  Interest where applicable would be charged @ Normal PLR+4% on the notional overdrawn balances in the account had credit not been given initially.

If   the    proceeds    of  the  cheque  were  credited  to the Savings  Bank  Account     and   were    not    withdrawn,  the   amount   so    credited  will   not  qualify   for   payment    of  interest  when  the  cheque   is   returned   unpaid.   If proceeds   were   credited    to    an overdraft  / loan  account,  interest  shall  be  recovered  at  the    rate  of  2%  above     the interest   rate   applicable to  the  overdraft / loan   from the  date  of  credit    to  the   date of  reversal  of the entry  if the cheque/ instrument was returned unpaid to the extent the Bank was out of funds.

8. Change / Modification :

Bank reserves right to change or to modify the Policy or any of its provisions from  time to time without notice.