CHEQUE COLLECTION POLICY

Reserve Bank of India has now advised individual banks to formulate their own policy in this regard. Accordingly our bank has formulated the following policy.

(i) Immediate credit of local/outstation cheques:

In order to take care of the interest of the small depositors our bank has fixed an amount of Rs 15,000 as the ceiling for affording immediate credit in respect of local / outstation cheques tendered for collection by their customers subject to the extant guidelines issued in this regard from time to time.

a) Immediate Credit of local cheques:

• Immediate credit will be provided at the specific request of the customer
• Branch Managers shall get satisfied as to the conduct of the account for a period not less than six months
• Immediate credit of local instruments up to and inclusive of Rs.15000/- may be permitted on recovery of collection charges of Rs.5/- per instrument
• Instruments will be accepted from individual lodgers who are account holders only
• The facility is restricted to one cheque at a time
• If cheque for which immediate credit has been afforded is returned unpaid, Bank shall recover interest as applicable to clean advances for the period bank remained out of funds

b)Immediate Credit of outstation cheques:

Outstation credit instrument/DDs up to Rs.15,000/- may normally be negotiated and immediate credit afforded to lodgers, subject to recovery of collection of normal charges as is being levied in our bank. The objective is to afford immediate credit in such cases without waiting for realization of the instrument.

The instruments should be accepted from individual lodgers only and not from others, to ensure that the benefit goes to small customers. Branches are advised to offer credit against cheques/DDs upto Rs.15000/- in respect of all individual customers provided there is no adverse experience in the past in the particular account. The instrument has to be thoroughly scrutinized to ensure that it is in order in all aspects.

This facility is to be extended in accounts maintained and operated satisfactorily for a period of 6 months or more, prior to the credit.

This facility is for immediate credit of only one cheque at a time and till such time the proceeds are realized, the branch should not extend the facility when fresh cheques are lodged by the customers. However, such instruments may be accepted for normal collection.

The purpose of extending this facility is to help small customers and branches therefore need not insist on a higher minimum balance in the account.

This facility may be extended both to savings and current account holders and particularly to all individual depositors without making a distinction about their status.

The facility may be extended to those accounts, which are properly introduced, satisfactorily operated and where there was no incidence of cheques being returned unpaid/refused payment.
For extending this facility no formal letter of request from the customers need be insisted upon.

In case, any such instrument (for which immediate credit was offered) bounces for financial reasons, immediate steps are to be taken for recovery of the amount with interest as applicable to clean advances from time to time under advice to us.

(ii) Time frame for collection of local/outstation cheques:

Our bank has stipulated 3 days for collection of local cheques and 14 days for collection of outstation cheques as the time frame for realisation of local / outstation cheques from the date of lodging of the instrument at the branches.

(iii)Interest payment for delayed collection:

Our bank has framed the following guidelines for payment of interest for delayed collection of outstation instruments:

a) Normal delay - upto 90 days beyond normal collection period:

Interest at the rate as applicable for appropriate tenor of fixed deposits for the period of delay beyond the bench mark time of 14 days fixed for collection of outstation cheques from the date of lodging of the instrument at the branches.

b) Abnormal delay-more than90 days beyond normal collection period:

In case of any abnormal delay of more than 90 days beyond the normal collection period, penal interest @ 2 % above the rate as applicable for the appropriate tenor of fixed deposit for the period of delay beyond the bench mark time of 14 days from the date of lodging of the instrument at the branches has to be paid.

Please note that the interest is required to be paid suo moto and without the customer having to claim it. However interest would not be payable on cheques/instruments lost in transit.