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
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
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.
/ 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:-
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.
case where the Bank is at fault, Bank will compensate the customer without demur.
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/-. “
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.
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.
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:
for the delay in crediting proceeds as indicated in the collection policy of the bank.
for any possible loss on account of adverse movement in foreign exchange rate.
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:
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:
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
the delay is beyond 14 working days, interest will be paid at the
rate applicable to term deposit for the respective period.
case of extraordinary delay, i.e. delay exceeding 90 days interest
shall be paid at the rate of 2% above the corresponding Term Deposit
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.
may be noted that interest payment as given above would be applicable
only for instruments sent for collection within India.
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
lost in transit / in clearing process or at paying bank’s
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.
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:
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
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
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.
of the Code by bank’s agent
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
of “at par instruments” of Co-operative Banks by
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.
of failed transactions at ATMs
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
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 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.
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.
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
will extend the scope of concurrent audit to cover cases of delay in
reimbursing the customers for failed ATM transactions.
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.
in return of original security documents and title deeds on
repayment of the Loan.
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
borrower/co-obligant makes a valid and formal demand for return of
bank in receipt of documents from the court/DRT, in case the same
have been lodged with the court by the bank.
is no adverse claim from the third parties on the said property.
bank receives discharge/ receipt of the documents from all the
persons having interest in the said property as per the records of
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/-.
in credit / return of NEFT / NECS / ECS transactions.
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.
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