Cheque Collection Policy
The policy is based on principles of transparency and fairness in the treatment of customers. The Bank is committed to increase use of latest technology to provide quick collection services and convenience to its customers.
Policy document covers the following aspects :
- Collection of cheques and other instruments payable locally / outstation / Abroad.
- The Bank’s commitment regarding time norms for collection of cheques/instruments.
- Policy in respect of “Immediate Credit“ of Cheques payable abroad.
- Guidelines on payment of interest in cases where the Bank fails to meet time norms for realization of proceeds of outstation cheques / instruments.
- The Bank’s policy on dealing with collection cheques/ instrument lost in transit.
All cheques and other negotiable instruments payable locally will be presented through the clearing system prevailing at the centre. Cheques deposited at Branch counters, Cheque collection machine and in collection boxes within the Branch premises before specified cut-off time will be presented for clearing on the same day. Cheques deposited after the cut-off time will be presented in the next clearing cycle. To fix the cut-off time limit for receipt of cheques will be decided by respective Branch Manager as per locations, based on local practices (Cut-off time will be displayed on the collection counter) The Bank will give credit to the respective customer account on the same day in which the clearing settlement takes place. Withdrawal of amounts so credited would be permitted as per the cheque return schedule of the respective clearing house.1.2 Cheques Payable Abroad
- Branches will receive the cheques/instruments and the application in prescribed format from the customers during business hours and will forward the same to HO-IBD for realization.
- The instruments will be sent to Nostro/Correspondent Banks by courier for realization where said services are available.
- The instruments which are payable in countries where the services stated in 03.02 above are not available will be sent to “Drawee Bank” for realization.
- The instruments drawn in currencies in which Bank does not maintain position shall be collected through other Bank in India as per arrangement.
- The instruments will be sent for collection as stated above at least once in a week to achieve economy in courier expenses.
- Instruments payable outside India will be collected at the risk & responsibility of the customers for which a prescribed application is submitted to the branch by the customer.
Bank branches situated at centers where no clearing house exists would be present local cheques on drawee banks across the counter and proceeds would be credited at the earliest, on realization.1.4 Cheques drawn on Bank’s own local and outstation Branches
Cheques drawn on Bank’s own Branches, at local or at outstation centers, irrespective of amount, received across the counter, through CDM or Drop Box are not required to be presented in clearing or purchased. These cheques will be paid by the receiving Branches at their end after verifying the genuineness of the cheque and observing all necessary precautions for payment of cheques, as if these have been drawn on them and will be afforded credit directly to the payee’s account using the CBS strength. In exceptional cases, such as –non availability of drawing power, any lien/stop / hold restrictions, exceeding limit in case of advance/loan account—inter branch cheques will be present through clearing cycle.1.5 Outstation Cheques
Cheques drawn on other Bank’s at outstation will normally be collected through Bank’s Branches at those centers. Where the Bank does not have a Branch of its own, the cheques would be directly sent for collection to the drawee or collected through correspondent Bank, and recover applicable service charges as per RBI’s instruction regarding collection of outstation cheques.1.6 Speed Clearing
- In order to facilitate faster collection of outstation cheques, the Reserve Bank of India started clearing called “Speed Clearing” by leveraging the core-banking –solutions (CBS) implemented in banks.
- Speed clearing refers to collection of outstation cheques through the local clearing. It facilitates collection of cheques drawn on outstation core-banking enabled branches of banks, if they have a networked branch locally. (Except Government cheques). This facility is presently extended at 66 MICR cheque processing centre locations in India. Under Speed Clearing outstation cheques would be realized on T+1 or 2 basis.
- As per RBI guidelines, Banks are permitted to levy charges as per their description for cheques above rupees 1 lakh presented through Speed Clearing.
- Not to collect cheques crossed “account payee” through third party accounts
- As per RBI circular No UBD.BPD.Cir. No41/12.05.001/2010-11 dated 29/03/2011
has allowed Banks to collect third party account payee cheques deposited by Credit Societies in their account for an amount not exceeding Rs. 50000/- subject to:-
A. The Co- Operative Credit Society’s current account to be opened as per the KYC norms.
B. Forms of agreement cum undertaking to be executed with the society on franking of Rs. 200/-
Validity of collection of cheques is three months, means any cheque/ instrument issued on or after 1st April, 2012 shall have validity period of three months.
2.1 Considering the availability of CBS facility and Speed Clearing facility, immediate credit of outstation /local cheques to deposit accounts of individuals are not recommended.2.2 Immediate Credit of Cheques Payable Abroad
- Bank may consider crediting the customer’s account immediately on receipt of Nostro credit without waiting till due date subject to compliance of following conditions and submission of following documents:
- Customer specifically requests in writing for same.
- Customer undertakes to reimburse the losses and expenses incurred by Bank due to return of instrument after crediting their account.
- Customer’s request is duly recommended by concerned branch.
- Customer’s account is conducted satisfactorily for last six months.
- Opened at least six months before and complies with KYC norms.
- Conducted satisfactorily and bank has not noticed any irregular dealings.
- Where no instruments for which immediate credit was afforded were returned unpaid for financial reasons in the past.
- Where the bank has not experienced any difficulty in recovering any amount advanced in the past including cheques returned after giving immediate credit.
For passing instant credit to the customers the ceiling of Rs. 50,000 or its equivalent foreign currency is proposed. In case the customer wants the same branch managers can send such request if within the limit of Rs. 50,000.
3.1 With the leverage of CBS, upgradation of technology and introduction of Speed Clearing System at MICR clearing centre, the time frame for collection of outstations cheques of other Bank’s CBS branches which are identified / notified by RBI in Speed Clearing System will be paid as per normal clearing cycle at the respective clearing centre.3.2 Time frame for collection of Cheques Payable abroad.
- The instruments sent to “Nostro/Correspondent banks” for collection will be credited to the account of the customer on Due Date. It is a general practice of giving immediate credit of the cheque amount to the Nostro account of the respective bank by correspondent bank. The date on which this is credited is called value date. As a normal practice an instrument can be returned by the drawee bank within 21 days from the presentation of the cheque. However, this period is not defined anywhere and may vary. The banks in India calculate the Due Date after 21 days from date of credit to Nostro account. For the purpose of calculation of due date the value date will be excluded eg. If the value date is 5th November, due date will be 26th November.
- The instruments sent to “Drawee Bank” for collection will be credited to the account of the customer immediately on receipt of credit in Nostro account.
- The instruments sent to “Other Bank in India” for collection will be credited to the customer’s a/c immediately on receipt of credit in Nostro Bank account.
3.3 The time frame for collection of cheques/ instruments of other than Local and Speed Clearing notified Bank/Branches is as under:-
|Sr.No.||Cheques/ Instrument Type||Time Norms||Remarks|
|1||Local Clearing||As per T+1 or 2basis /as per thecheque return schedule of the respective Clearing House|
|2||Outstation cheques,where cheque is drawn on a state capital||Seven working days||1) Working days shall not include Banks holidays and days when clearing house is not operational.
2) The Bank shall not be liable for Time Norms ,if some unforeseen event beyond the control of the Bank prevents it from performing its obligations within the specified service delivery parameters (**)
|3||Outstation cheques where cheque is drawn on a major city||Ten working days|
|4||Outstation cheques presented through Gatiman scheme-HDFC Bank||Ten working days|
|5||Outstation cheques where cheque is drawn on any other location in India||Fourteen working days|
|6||Cheques Payable Abroad||Amount will be credited to the concern account on Due Date||The Banks in India calculate the Due Date after 21 days from date of credit to Nostro account|
(** Unforeseen event —including but not limited to civil commotion, sabotage, ,lockout, strike ,accident, fires, natural disasters or other “Acts of God”, war, damage to the Bank’s facilities or its correspondent bank(s), absence of the usual means of communication or all types of transportation etc.)
3.4 The time frame mentioned above are the outer limits and once the instruments are realized, proceeds should be credited to the respective customer’s account immediately.
3.5 Delays in collection of cheques/ instruments beyond 45 days, from notional date of credit as per time frame above, would be treated as abnormal delays.
It is the responsibility of the Bank to collect the cheques /instruments within the time frame prescribed for the purpose and to compensate the customers for delay due to non-adherence to time schedule. Following guidelines are, therefore, laid down for cheques/ instruments payable in India.
4.1 Interest shall be payable on daily product basis, without any claim from the concern customers, if the cheques / instruments are not realized / proceeds credited to the customers accounts within the period mentioned in paragraph 4.3 above.
4.2 The rate of interest payable will be equivalent to the Saving Bank interest rate, i.e. currently 2.75% p.a.(w.e.f 01.07.2020) if the collections of outstations cheques / Instruments are delayed beyond the stipulated period 7/10/14 days and upto 45 days where the proceeds are to be credited to deposit accounts. Where proceeds are to be credited to overdraft or loan accounts, interest payable would be at rate applicable on overdraft / loan account linked to base rate.
4.3 For abnormal delays, exceeding 45 days from the notional date of credit as per time frame mentioned in paragraph 4.3 above, the rate of interest payable would be @ 2% above the prescribed rate i.e. 6% p.a. in deposit accounts and @ 1% above the applicable rate in case of overdraft /loan accounts.
4.4 Force majeure :- The Bank shall not be liable for Time Norms ,if some unforeseen event (including but not limited to civil commotion, sabotage, ,lockout, strike ,accident, fires, natural disasters or other “Acts of God”, war, damage to the Bank’s facilities or 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.
5.1 In the event of a cheque / instrument accepted for a collection is lost in transit / in 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 account holder, so that account holder 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 / instrument. The Bank will provide all assistance to the customer to obtain a duplicate instrument from the drawer of the cheques.
5.2 If the Bank loses the cheque, the Bank will bear the stop payment charges on customer producing relevant documents.5.3 The compensation in such cases would be as follows:-
- Incase 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.
- In addition, bank will pay interest on the amount of the cheque for a further period of 15 days at Saving Bank rate to provide for likely further delay in obtaining duplicate cheque/instrument and collection thereof.
- The Bank would also compensate the customer for any reasonable charges, he /she incurs in getting duplicate cheque/ instrument upon production of receipt , on the event the instrument is to obtained from a bank / institution that would charge a fee for issue of duplicate instrument.
6.1 The Bank has to return / dispatch the dishonored cheque / instrument to the respective customer without delay, in any case within 24 hours.
6.2 In relation to cheques presented direct on the counter for settlement of transaction by way of transfer between two accounts within Bank, and if it is dishonored, it should be return to payees/ holder immediately.
6.3 Frequent dishonor of collection cheques /instrument for amount of Rs. 50.00 Lacs in any particular account, Branch official should issue causation latter to respective account holder and also report to Head Office / CPC Dept.
For all collection of outstation cheques / instruments services, the Bank will recover appropriate service charges as decided by the Bank from time to time.