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Introduction:
Technological
progress in payment and settlement systems and the qualitative
changes in operational systems and processes that have been
undertaken by various players in the market have enabled market
forces of competition to come into play to improve efficiencies in
providing better service to the users of the system. It will be the
bank’s endeavor to offer services to its customers with best
possible utilization of its technology infrastructure. Withdrawal of
the Reserve Bank of India instructions to banks on time frame for
collection of outstation cheques, payment of interest on delayed
collection of outstation cheques / instruments, with effect from 1st
November 2004, had offered bank further opportunities to increase its
efficiency for better performance. This Compensation Policy of the
bank is therefore, designed to cover areas relating to unauthorized
debiting of account, payment of interest to customers for delayed
collection of cheques / instruments, payment of cheques after
acknowledgement of stop payment instructions, remittances within
India, foreign exchange services, lending, etc. The policy is based
on principles of transparency and fairness in the treatment of
customers.
The
objective of this policy is to establish a system whereby the bank
compensates the customer for any financial loss he/she might incur
due to deficiency in service on the part of the bank or any act of
omission or commission directly attributable to the Bank. By ensuring
that the customer is compensated without having to ask for it, the
bank expects instances when the customer has to approach Banking
Ombudsman or any other Forum for redressal to come down
significantly.
It
is reiterated that the policy covers only compensation for financial
losses which customers might incur due to deficiency in the services
offered by the bank which can be measured directly and as such the
commitments under this policy are without prejudice to any right the
bank will have in defending its position before any forum duly
constituted to adjudicate banker-customer disputes.
Un-authorized
/ Erroneous Debit
If
the bank has raised an unauthorized / erroneous direct debit to an
account, the entry will be reversed immediately on being informed of
the erroneous debit, after verifying the position. In the event the
unauthorized / erroneous debit has resulted in a financial loss for
the customer by way of reduction in the minimum balance applicable
for payment of interest on savings bank deposit or payment of
additional interest to the bank in a loan account, the bank will
compensate the customer for such loss. Further, if the customer has
suffered any financial loss incidental to return of a cheque or
failure of direct debit instructions due to insufficiency of balance
on account of the unauthorized / erroneous debit, the bank will
compensate the customer to the extent of such financial losses.
In
case verification of the entry reported to be erroneous by the
customer does not involve a third party, the bank shall arrange to
complete the process of verification within a maximum period of 7
working days from the date of reporting of erroneous debit. In case,
the verification involves a third party, the bank shall complete the
verification process within a maximum period of one month from the
date of reporting of erroneous transaction by the customer.
“Reversal
of Erroneous Debits arising on Fraudulent or other transactions:-
(i) In
case of any fraud, if the branch is convinced that an irregularity /
fraud has been committed by its staff towards any constituent, Bank
will at once acknowledge its liability and pay the just claim.
(ii) In
case where the Bank is at fault, Bank will compensate the customer
without demur.
(iii) In
cases where neither the Bank nor the customer is at fault, but the
fault lies elsewhere in the system, Bank will compensate the
customers upto a limit of Rs.10000/-. “
ECS
direct debits / other debits to accounts
The
bank will undertake to carry out direct debit / ECS debit
instructions of customers in time. In the event the bank fails to
meet such commitments customer will be compensated to the extent of
any financial loss the customer would incur on account of delay in
carrying out the instruction/failure to carry out the instructions.
The
bank would debit the customer’s account with any applicable
service charge as per the schedule of charges notified by the bank.
In the event the bank levies any charge in violation of the
arrangement, the bank will reverse the charges when pointed out by
the customer subject to scrutiny of agreed terms and conditions. Any
consequential financial loss to the customer will also be
compensated.
Payment
of Cheques after Stop Payment Instructions
In
case a cheque has been paid after stop payment instruction is
acknowledged by the bank, the bank shall reverse the transaction and
give value-dated credit to protect the interest of the customer. Any
consequential financial loss to the customer will be compensated as
provided under para 1 above. Such debits will be reversed within 2
working days of the customer intimating the transaction to the bank.
Foreign
Exchange Services
The
Bank would not compensate the customer for delays in collection of
cheques designated in foreign currencies as the bank would not be
able to ensure timely credit from overseas banks. It is the bank’s
experience that time for collection of instruments drawn on banks in
foreign countries differ from country to country and even within a
country, from place to place. The time norms for return of
instruments cleared provisionally also vary from country to country.
Bank however, would consider upfront credit against such instrument
by purchasing the cheque / instrument, provided the conduct of the
account has been satisfactory in the past. However, the bank will
compensate the customer for undue delays in affording credit once
proceeds are credited to the Nostro Account of the bank with its
correspondent. Such compensation will be given for delays beyond one
week after expiry of normal cooling period stipulated from the date
of credit to Nostro account. The compensation in such cases will be
worked out as follows:
a) Interest
for the delay in crediting proceeds as indicated in the collection
policy of the bank.
b) Compensation
for any possible loss on account of adverse movement in foreign
exchange rate.
Remittances
in India
The
compensation on account of delays in collection of instruments would
be as indicated in the bank’s collection policy, which is
reproduced below for information:
Payment
of Interest for delayed Collection of Local/Outstation Cheques:
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
in Cheque Collection Policy. 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 in Cheque Collection Policy, 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
rate.
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.
The
bank’s compensation policy for financial loss suffered by the
customers due to loss of instrument after it has been handed over to
the bank for collection by the customer would also be same as
indicated in our collection policy. The same is extracted below for
information:
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 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.
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:
In
case intimation regarding loss of instrument is conveyed to the
customer beyond the time limit stipulated for collection (07/10/14
days as the case may be) interest will be paid for the period
exceeding the stipulated collection period at the rates specified
above.
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.
In
the event the instrument is to be obtained from a Bank/institution
who would charge a fee for issue of duplicate instrument, such a
reasonable charge incurred by the customer will be compensated by
the Bank on production of proof of such payment.
Violation
of the Code by bank’s agent
In
the event of receipt of any complaint from the customer that the
bank’s representative / courier or DSA has engaged in any
improper conduct or acted in violation of the Code of Bank’s
Commitment to Customers which the bank has adopted voluntarily, bank
shall take appropriate steps to investigate and to handle the
complaint and to compensate the customer for financial losses, if
any.
Transaction
of “at par instruments” of Co-operative Banks by
Commercial Banks
Once
the Bank has entered into an arrangement with a Co-operative Bank to
pay its instruments ‘at par’ the Bank will honour all
such cheques payable ‘at par’ irrespective of the fact
whether such instruments have been funded by the Co-operative Bank or
not. In case prior funding is not made, the Bank will take up the
issue separately with the issuing Bank. However, before entering into
such an arrangement with Co-operative Bank the Bank shall make proper
funding arrangement as well.
Reconciliation of failed transactions at ATMs
All
admitted customer claims about wrongful debit on account of failed
ATM transactions will be reimbursed to the customer within a maximum
period of 7 working days from the date of the receipt of the
customer complaint.
For
any failure to re-credit the customer’s account within 7
working days from the date of receipt of the complaint, the bank
will pay compensation of Rs.100/-, per day, to the aggrieved
customer.
Any
customer is entitled to receive such compensation for delay, only if
a claim is lodged with the issuing bank within 30 days of the date
of the transaction.
The
number of free transactions permitted per month at other bank ATMs
to savings Bank account holders shall be inclusive of all type of
transactions, financial and non-financial.
All
disputes regarding ATM failed transactions shall be settled by the
issuing bank and the acquiring bank through the ATM system provider
only. No bilateral settlement arrangement outside the dispute
resolution mechanism available with the system provider is
permissible.
Banks
will extend the scope of concurrent audit to cover cases of delay in
reimbursing the customers for failed ATM transactions.
Bank
will also place a quarterly review of ATM transactions to the Board
of directors, indicating inter alia, the quantum of penalties paid,
reasons thereof and the actions taken to avoid recurrence of such
instances. A copy of the note along with the observations of the
Board will be forwarded to the Chief General Manager, Reserve Bank
of India, Department of Payment & Settlement Systems, Mumbai.
Delay
in return of original security documents and title deeds on
repayment of the Loan.
The
original security documents submitted by the borrower would be
returned to the borrower within 15 days of repayment of all dues by
the borrower, including principal amount, interest, EMI, costs,
service charges and all other due as per the terms and conditions in
the loan agreement signed by the borrower subject to the following
conditions that
The
borrower/co-obligant makes a valid and formal demand for return of
the documents.
The
bank in receipt of documents from the court/DRT, in case the same
have been lodged with the court by the bank.
There
is no adverse claim from the third parties on the said property.
The
bank receives discharge/ receipt of the documents from all the
persons having interest in the said property as per the records of
the bank.
The
borrower would be paid an amount of Rs. 100/- per week in case of any
delay in returning of the documents beyond 15 days of loan repayment,
subject to a maximum payment of Rs.500/-.
Delay
in credit / return of NEFT / NECS / ECS transactions.
The
bank will undertake to carry out credit / return of NEFT / NECS / ECS
transactions in time. In the event of delay, the bank would pay
penal interest at the current RBI LAF Repo Rate plus two per cent
from the due date of credit till the date of actual credit for any
delayed credit to the beneficiaries’ account. Penal interest
shall be credited to the Beneficiary’s Account even if no claim
is lodged.
Force
Majeure
The
bank shall not be liable to compensate customers if some unforeseen
event (including but not limited to civil commotion, sabotage,
accident, fires, nature 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.
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