1. Introduction

Keeping in view the technological progress in payment and settlements systems and the qualitative changes in operational systems and processes that have been undertaken by a number of banks, the Reserve Bank of India had, with effect from 1st November 2004, withdrawn its earlier instructions to commercial banks on :

(i) Immediate Credit of local/outstation cheques,
(ii) Time Frame for Collection of Local/Outstation Instruments and
(iii) Interest Payment for Delayed Collection.

The withdrawal of these mandatory guidelines was expected to enable market forces of competition to come into play to improve efficiencies in collection of cheques and other instruments. 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 performance. The policy is based on principles of transparency and fairness in the treatment of customers. The bank is committed to increased uses of technology to provide quick collection services to its customers. This policy document covers the following aspects:

• Collection of cheques (including Cheques purchased) and other instruments payable locally, at centers within India and abroad.
• Our commitment regarding time norms for collection of instruments
• Policy on payment of interest in cases where the bank fails to meet time norms for realization of proceeds of outstation instruments.
• Our policy on dealing with collection instruments lost in transit.

2. Arrangements for Collection :

Local Cheques
All cheques and other Negotiable Instruments payable locally would be presented through the clearing system prevailing at the center. Cheques deposited at branch counters and in collection boxes within the branch premises before the specified cut-off time will be presented for clearing as far as possible on the same day. Cheques deposited after the cut-off time and in collection boxes outside the branch premises including off-site ATMs will be presented in the next available clearing cycle. As a policy, bank would give credit to the customer’s account on the same day clearing settlement takes place at that centre. Withdrawal of amounts so credited would be permitted as per the cheque return schedule of the clearing house. Wherever applicable, facility of high-value clearing (same day credit) will be extended to customers.

The respective branches will display the cut-off time for receipt of cheques to be sent in clearing on the same day in their premises. The cut-off time for collection of cheques from drop boxes installed at off-site ATM will be displayed on the face of the drop boxes. Accordingly, cut-off time for receipt of high value clearing and receipt of cheques for payment to Government accounts like Income Tax etc., will also be displayed in the branches. 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.

2.2. Outstation Cheques

Cheques drawn on other banks at outstation centers will normally be collected through bank’s branches at those centers. Where the bank does not have a branch of its own, the instruments would be directly sent for collection to thedrawee bank or collected through a correspondent bank. The bank would also use the National Clearing Services offered by the Reserve Bank of India at centres where such collection services exist.
Cheques drawn on bank’s own branches at outstation centers will be collected using the inter-branch arrangements in vogue. Branches which are connected through a centralized processing arrangement and are offering anywhere banking services to its customers will provide credit within two working days subject to availability of balance to its customers in respect of outstation instruments drawn on any of its branches in the CBS network and charges as applicable will be levied.

2.3 Cheques payable in Foreign Countries

Cheques payable at foreign centers where the bank has branch operations (or banking operations through a subsidiary, etc.) will be collected generally through that office/branch. The services of correspondent banks will be utilized in country/centres where the correspondent has presence. Cheques drawn on foreign banks at centres where the bank or its correspondents do not have direct presence will be sent direct to the drawee bank with instructions to credit proceeds to the respective Nostro Account of the bank maintained with one of the correspondent banks.

The Bank will endeavour to provide the credit to its Customers immediately on completion of hold/cooling period by converting the foreign currency to Indian Rupees by applying Bank’s TT Buying Rate prevailing on that day. The time norms for collection and return of the instruments varies from country to country and place to place within the country where a ‘hold period’ is prescribed. The due date for providing credit is calculated and taken as one more week from date of notional credit in NOSTRO account plus the hold period prescribed for the country.