POLICY ON COLLECTION OF CHEQUES/INSTRUMENTS
view the technological development in payment and settlement systems
and the qualitative changes in operational systems and processes that
have been made/advised by the Reserve Bank of India, all the member
banks are revising/modifying their cheque collection policy. In order
to extend the benefit of 100% Core Banking Solution (CBS) to our
customers and to implement the ‘Anywhere’ banking concept
in its true spirit, we propose revision/modification of our existing
Cheque Collection Policy. This collection policy of the Bank is a
reflection of our on-going efforts to provide better service to our
customers and set higher standards for improved performance. The bank
is committed to increased use of technology to provide quick
collection services to its customers and the policy is based on
principles of transparency and fairness in the treatment of
customers. This policy document covers the following aspects:
of cheques and other instruments payable locally, at centers within
India and abroad.
commitment regarding time norms for acceptance/
collection/realization of such instruments.
on payment of compensation/interest in cases where the bank fails to
meet time norms for realization of proceeds of local / outstation
policy on dealing with collection instruments lost in transit.
policy in handling frequent dishonour of cheques.
2. Arrangements for Collection:
cheques and other Negotiable Instruments payable locally would be
presented through the clearing system prevailing at the respective
general, cheques received within three hours from the time of
commencement of business hours of the branch, on working days, from
Monday to Friday and cheques received within 30 minutes of the
commencement of the business on Saturdays shall be sent for clearing
on the same day. However, the time may vary depending upon the:
cheque clearing timings
required for traveling to the Clearing House/Main Clearing
of conveyance facility.
deposited after the cut-off time and in collection boxes outside the
branch premises including off-site ATMs shall be presented in the
next clearing cycle. The cut off time up to which the cheques
received will be sent for clearing on the same day is available on
the Branch Notice Board. The cut off time prescribed for each
collection box will be indicated on the face of the Box.
drawn on other banks at outstation centers shall 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 offered by the Reserve Bank of India at centers where such
collection services exist. However, while collecting cheques for NRE
account holders, collecting branches shall ensure the eligibility of
funds for credit to NRE accounts, as balance in such accounts is
order to extend the benefit of Core Banking Solution, the following
arrangement is made for collection of cheques.
For Cheques drawn on our Bank branches, tendered by the customers of
the Bank, during business hours:
amount of cheques drawn on any of our branches, tendered during the
business hours of the branch, shall be credited on the same day
(subject to availability of sufficient funds in the drawer’s
account and the cheque is properly drawn) through Intersol
amount of cheques drawn on any of our branches, tendered after
business hours of the branch, shall be credited on the next working
day (subject to availability of sufficient funds in the drawer’s
account and the cheque is properly drawn).
Collection of cheques tendered by the customers of other branches:
order to implement anywhere banking concept in its true spirit,
Customers of our Bank are permitted to tender either local or
outstation cheques, for collection at any of our branches. The branch
where the cheque is tendered should handle the cheque as per the
procedure for collecting local / outstation cheques through Intersol.
time frame for collection of cheques drawn on any of our branches may
be fixed as the same day for cheques presented during business hours
and next working day for cheques received after business hours. The
above arrangement is for customers maintaining account with our own
branches and for account to account transfer within our bank only.
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. Speed clearing aims to reduce the time taken for
realization of outstation cheques. Outstation cheque collection
through collection basis takes around one to two weeks depending on
the corresponding / drawee bank for this purpose however under Speed
clearing; it would be two to three working days.
Bank can thus now locally pay outstation cheques of branches covered
under CBS without having to physically send the cheque to the branch
of the drawee bank for clearing. Speed clearing’ is operational
at all MICR Centers.
which are drawn on CBS-enabled banks' branches, are eligible for
being presented in Speed clearing. Pay Orders, Demand Drafts,
Government instruments and cheques drawn on a bank or bank branch,
which is not a part of the Speed clearing System, are not eligible
for collection under Speed clearing.
Cheques payable in Foreign Countries
case of cheques payable in Foreign Countries 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 directly to the drawee bank with instructions
to credit proceeds to respective Nostro Account of the bank
maintained with one of the correspondent banks. The maximum period
for affording the credit to the beneficiary’s account for the
cheques drawn in foreign currency is 45 days.
the possibility of using latest technology like image transmission
(cheque 21) etc. for speedy collection of cheques wherever possible
is being explored.
Immediate Credit of Local / Outstation Cheques / Instruments
/ extension counters of the bank shall consider providing immediate
credit for outstation cheques / instruments up to the aggregate value
of Rs 15,000/- (Rupees fifteen thousand only) tendered for collection
by individual account holders subject to satisfactory conduct of such
the purpose of this Policy, a satisfactorily conducted account shall
be the one:
at least six months earlier and complying with KYC norms.
of which has been satisfactory and bank has not noticed any
no cheques / instruments for which immediate credit was afforded
returned unpaid for financial reasons
the bank has not experienced any difficulty in recovery of any
amount advanced in the past including cheques returned after giving
credit shall be provided against such collection instruments at the
specific request of the customer or as per prior arrangement. The
facility of immediate credit would also be made available in respect
of local cheques at centers where no formal clearing house exists.
cheque collection charges and actual postage if any would be
collected for affording immediate credit. To avail this facility the
be in order in all respects
not be drawn/issued by exchange companies
not be drawn by the account holder himself seeking immediate credit
(in case of cheques drawn on other Banks)
be in favour of the account holder seeking for immediate credit
facility of extending immediate credit shall not be afforded to the
following category of accounts/customers:
in the name of minors.
Sugama (No frill account)
tendered after business hours shall be dealt with on the next working
a cheque sent for collection for which immediate credit was provided
by the bank is returned unpaid, the value of the cheque shall be
immediately debited to the account. The customer shall 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 on the notional overdrawn balances in the account had credit
not been given initially.
the proceeds of the cheque were credited to the Savings Bank Account
and were not withdrawn, the amount so credited shall not qualify for
payment of interest when the cheque is returned unpaid.
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 were returned unpaid to the
extent the bank was out of funds.
above charges are excluding the prescribed cheque return charges and
2.6 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 shall also be a factor considered while
purchasing the cheque.
3.Time Frame for Collection
A.Local Cheques / Instruments:
As a policy, in case of local Cheques, banks shall permit usage of the
shadow credit afforded to the customers’ account immediately after closure of relative return clearing and in any case, withdrawal shall be allowed on the same day or maximum within an hour of the
commencement of business on the next working day, subject to usual safeguards.
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
B.Outstation Cheques / Instruments:
ForCheques and other instruments drawn on other banks and sent for
collection to centers within the country the following time norms shall be applied:
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 working days.
Metro Centers and State Capitals (other than those of North Eastern States
and Sikkim): Maximum period of 10 working days.
In all other Centers: Maximum period of 14 working days.
Cheques drawn on foreign countries are accepted for collection on the “best
efforts” basis and depending on various factors credit may be afforded within 45 days.
4.Payment of Interest for delayed Collection of Local/Outstation
As part of the compensation policy of the bank, the bank shall 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 including local cheques for the purpose of payment of interest on delayed collection.
Interest for delayed collection shall be paid at the following rates:
A. For Local Cheques / Instruments:
As per the time frame detailed above compensation will be paid at
savings bank interest rate for the corresponding period of delay
B. For Outstation Cheques / Instruments:
Savings Bank rate for the period of delay beyond 7/10/14 working days as the
case may be, in collection of outstation Cheques drawn on other banks.
If the delay is beyond 14 working days, interest will be paid at the
rate applicable to term deposit for the respective period.
In case of extraordinary delay, i.e. delay exceeding 90 days interest
shall be paid at the rate of 2% above the corresponding Term Deposit
In the event of the proceeds of cheque under collection were to be
credited to an overdraft/loan account of the customer, interest shall be paid at the rate applicable to the loan account. For extraordinary delay, interest shall be paid at the rate of 2% above
the rate applicable to the loan account.
It may be noted that interest payment as given above would be applicable
only for instruments sent for collection within India.
If the delay in realization of the cheque is on account of clearing
bank/paying bank, then for the unjustified delay by the clearing bank/paying bank, no compensation/interest will be paid. However, the customer will be informed about the delay so as to enable the
customer to take appropriate action or refer it to the Banking Ombudsman.
5.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 account holder so that the
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 /
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 shall
compensate the account holder in respect of instruments lost in transit in the following way:
In case intimation regarding loss of instrument is conveyed to the
customer beyond the time limit stipulated for collection (7/10/14 working days as the case may be) interest shall be paid for the period exceeding the stipulated collection period at the rates
In addition, bank shall 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.
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 and also charges if any, for recording Stop Payment on production of receipt.
6.Delay in re-presentation of technical return Cheques and levy of
charges for such returns
Cheque return charges shall be levied only in cases where the customer is
at fault and is responsible for such returns. The illustrative, but not exhaustive, lists of returns, where the customers are not at fault are:
mutilated; requires bank’s guarantee
House stamp / date required
delivered / not drawn on us
in proper zone
contains extraneous matter
not clear; present again with paper
Crossed to two banks
stamp not cancelled
stamp not cancelled
specially crossed to another bank
endorsement irregular / requires collecting bank’s
by mark / thumb impression requires attestation by Magistrate
/ Name differs on advice
bank’s fund with sponsor bank insufficient (applicable to
separate discharge to bank required
payable till 1stproximo
Order requires counter signature
information not legible / correct
certificate ambiguous / incomplete / required
lost by issuing office; confirmation required from issuing
/ Branch blocked
Certificate validation failure
a/c Credited’ – Stamp required
returned as above that need to be re-presented without any recourse
to the payee, shall be made in the immediate next presentation
clearing not later than 24 hours (excluding holidays) with due
notification to the customer of such re-presentation through SMS
alert, email etc.
the control of the Bank
The bank shall not be liable to compensate customers for delayed credit
in case of unforeseen event including but not limited to civil commotion, sabotage, lockout, strike or other labour disturbances, accident, fires, war, damage to the bank’s facilities or of its correspondent bank(s), absence of usual means of communication or all
types of transportation, etc beyond the control of the bank preventing it from performing its obligations within the specified service delivery parameters.
8.Procedure for handling dishonoured Cheques
(a) For Cheques tendered at the base branch:
The cheque shall be returned to the customer as early as possible. If he
is a customer visiting the branch regularly either personally or through his representative the cheque shall be delivered to him/his
representative across the counter on the very next day if not on the same day.
In other cases, the cheque will be dispatched to him within three day
through Registered Post / Courier at the cost of the customer.
(b) For cheques tendered at non-base branch:
The cheque shall be returned to the customer through the base branch. The
non-base branch shall hereby send the cheque to the base branch. On receipt of the cheque at the base branch, that base branch shall
deliver the cheque to the customer as specified in (a) above. In this case, additional actual postage charges incurred by the non-base
branch to send the cheque to the base branch shall also be collected by the base branch.
(c) Procedure for return/dispatch of dishonoured Cheques:
The paying branch should return dishonoured Cheques presented through
clearing houses strictly as per the return discipline prescribed for respective clearing house in terms of Uniform Regulation and Rules
of Bankers’ Clearing Houses.
Cheques dishonoured for want of funds in respect of all accounts should be
returned along with the memo indicating therein the reason for dishonour as “insufficient funds.”
(d) Information on dishonoured Cheques:
Data in respect of each dishonoured cheque for amount of Rs.1 crore and
above and below 1 crore will be made part of bank’s MIS on constituents and concerned branches should report such data to respective Regional Office and to the Head Office.
Data in respect of Cheques drawn in favor of stock exchanges and
dishonoured should be consolidated separately by the branches irrespective of the value of such cheque as a part of MIS relating to broker entitles, and be reported to respective Regional Office
and to the Head Office.
(e) Dealing with incidence of frequent dishonour:
(A) Frequent dishonour of Cheques / ECS mandate for amount above 1 Crore.
With a view to enforce financial discipline among the customers, branch
will introduce a condition for operation of accounts with cheque facility that in the event of dishonour of cheque valuing rupees one
crore and above drawn on a particular account of the drawer on four occasions during a quarter for want of sufficient funds in the
account, bank will send notice advising to maintain sufficient balance in the account before issuing Cheques. Further the account shall be reviewed and closely monitored.
For the purposes of introduction of the condition mentioned at (i) above
in relation to operation of the existing accounts, branch may, at the time of issuing new cheque book, issue a letter advising the constituents of the new condition.
If a cheque is dishonoured for a third time in case of value rupees one
crore and above on a particular account of the drawer during the quarter, branch will issue cautionary advice to the concerned constituent drawing his attention to aforesaid condition and
consequential stoppage of cheque facility in the event of cheque being dishonoured on fourth occasion for value rupees 1 crore and above on the same account during quarter. Similar cautionary advice
will be issued if a branch intends to close the account with the permission of sanctioning authorities not higher than level of Managing Director in the borrowal account and with the permission of
Regional Head in case of other accounts.
(B) Frequent dishonour of Cheques / ECS mandate for amount below 1 Crore.
At the time of issuance of cheque – book / accepting mandate of
ECS the customer would be put on notice that it is their responsibility to ensure that adequate funds are maintained in the account to honour their commitment of payment.
On reaching the number of incidents of dishonour of cheque / ECS
mandate on 40 occasions during the quarter cautionary advice would be issued stating that any more instances would disentitle the customer from availing facility of cheque – book / ECS
mandate. In respect of Cash – Credit / OD accounts additionally, clarification would be sought as to the circumstances under which adequate funds were not maintained in the account and
this factor would be given weight age at the time of renewal / review of credit facilities.
Despite the customer being cautioned if such incidents of dishonor persist,
in the event of dishonour of cheque valuing rupees one crore and below drawn on a particular account of the drawer on 40 occasions during a quarter for want of sufficient funds in the account, bank
will send notice advising to maintain sufficient balance in the account before issuing Cheques. Further the account shall be reviewed and closely monitored. In continuation of the above, if
the cheque return in a particular account persists continuously for two quarters, under such accounts the branch should be instructed not to issue fresh cheque book without permission of sanctioning
authorities not higher than level of Managing Director in the borrowal account and without the permission of Regional Head in case of other accounts.
If considered appropriate, Bank can give adequate notice of 15 days and
close the account by recovering charges / dues if any and remitting the remaining balance by pay order / draft to the address on record of the Bank by registered post. In case of cash credit/overdraft
accounts, this fact shall be referred to appropriate authority as mentioned in clause 8 (e) (B) iii.
For the purpose of adducing evidence to prove the fact of dishonour of
cheque on behalf of a complainant (i.e. payee / holder of a dishonoured cheque) in any proceeding relating to dishonoured cheque before a court, consumer forum or any other competent authority,
branch should extend full co-operation, and should furnish him / her documentary proof of fact of dishonour of Cheques.
Bank retains the right to amend / modify the policy and display of the
same on notice board of branches / on the web site would be deemed to be adequate notice to customers of the said change.
9. Service Charges
All services shall be charged at the prescribed rates. The details of
tariff would be available at the Bank’s website and at Bank’s branches.
10. Force Majeure
The bank shall not be liable to compensate customers for delayed credit
in case of natural disasters or other “Acts of God” etc beyond the control of the bank preventing it from performing its
obligations within the specified service delivery parameters.