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INTRODUCTION
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 use of technology to provide quick collection services to its Customers.
This document covers the following aspects:
- Collection of cheques and other instruments payable locally, at centers within India and abroad.
- Commitment regarding time norms for collection of instruments.
- Payment of interest in cases where the bank fails to meet time norms for realization of proceeds of outstation instruments.
- Dealing with collection instruments lost in transit.
OBJECTIVE OF THE POLICY
The objective of this policy is to establish a system whereby the Bank shall pay interest that the Customer may lose due to delay in collection of cheques/instruments deposited by the Customer, without having been asked for the same.
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.
1. Arrangements for collection:
1.1 Local Cheques All cheques and other Negotiable Instruments payable locally would be presented through the clearing system prevailing at the centre. Cheques deposited at branch counters and in collection boxes within the branch premises before the specified cut-off time will be presented for clearing 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 clearing cycle. The bank would give credit to the Customer account on the same day clearing settlement takes place. Withdrawal of amounts so credited would be permitted as per the cheque return schedule of the clearing house. Wherever applicable Customers will be eligible to earn interest from the day of clearing credit.
Wherever applicable, facility of high-value clearing will be extended to Customers. High Value cheques presented before the specified cut off time will be presented in High Value clearing and bank would give the credit on the same day.
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.
1.2 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, 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.
Cheques drawn on bank’s own branches at outstation centers will be collected using the inter-branch arrangements in vogue. Branches will provide same day credit to its Customers in respect of outstation instruments drawn on any of its branches in respect of accounts enjoying anywhere banking facility
1.3 Cheques payable in Foreign Countries
Foreign currency cheques will be sent to correspondent banks at the respective foreign centers or drawee bank where the Bank does not have correspondent(s), with instructions to credit proceeds to the respective Nostro Account of the bank maintained with one of the correspondent banks.
1.4 Timings for acceptance:
(i) Collection timings for local cheques The cut-off-time for sending cheques for collection received across the counter or cheques dropped in cheque drop-box situated at branches would be indicated in our branches. The cut-off-time will be worked out for each/ location based on cut off time afforded by clearing house and the distance of branch to the clearing centre.
Cheques dropped in cheque drop-box at ATM centres and offsite centres will be sent for clearing on the next working day and the same will be indicated on each drop-box.
(ii) Outstation Cheques
Cheques deposited across the counter or cheques dropped in cheque drop-box situated at branches before 3 p.m. will be sent for collection on the same day. Cheques deposited after 3 p.m. will be sent for collection on the next day.
Cheques dropped in cheque drop-box at ATM centres and offsite centres will be sent for collection on the next working day and the same will be indicated on each drop-box.
1.5 Immediate Credit of Local / Outstation Cheques / Instruments Branches / extension counters of the bank will consider providing immediate credit for outstation cheques / instruments up to the aggregate value of Rs 15,000/- tendered for collection by individual account holders subject to satisfactory conduct of such accounts for a period not less than 6 months. Immediate credit will 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 clearinghouse exists.
The facility of immediate credit will be offered on Savings Bank / Current / Cash Credit Accounts of the Customers. For extending this facility there will not be any separate stipulation of minimum balance in the account.
Under this policy, prepaid instruments like Demand Drafts, Interest / Dividend warrants shall be treated on par with cheques.
For the purpose of this Policy, a satisfactorily conducted account shall be the one
- Opened at least 6 months earlier and complying with KYC norms.
- Conduct of which has been satisfactory and bank has not noticed any irregular dealings.
- Where no cheques / instruments for which immediate credit was afforded returned unpaid for financial reasons
- Where the bank has not experienced any difficulty in recovery of any amount advanced in the past including cheques returned after giving immediate credit.
- Average Quarterly Balance as applicable to be maintained for the last 2 quarters.
Bank shall levy normal collection charges and out of pocket expenses while providing immediate credit against outstation instruments tendered for collection. Exchange charges applicable for cheque purchase will not, however be charged.
1.6 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 will also be a factor considered while purchasing the cheque. Interest for purchase of local/ outstation cheques will be as per the norms prescribed from time to time.
2 Time Frame for Collection of Local / Outstation Cheques / Instruments:
2.1 For local cheques presented in clearing credit will be afforded as on the date of settlement of funds in clearing and the account holder will be allowed to withdraw funds as per return clearing norms in vogue.
2.2 Cheques / Instruments presented in high value clearing (with the minimum value of Rs.1 lac) shall be credited on the same day (applicable only in areas covered by high value / same day clearing).
2.3 For cheques and other instruments sent for collection the following time norms shall be applied but the credit will be only afforded only after receipt of the proceeds of cheques/ instruments.
2.3.1 Cheques/ Instruments payable at Centres within the Country
(I) Cheques drawn on our branches:
a. Cheques drawn on our branches situated at any of Metro and Urban centres: Maximum period of 7 days.
b. Cheques drawn on our branches situated at any other centres: Maximum period of 10 days
(II) Cheques drawn on branches of other banks:
i. Where IndusInd Bank has a branch:
a. Cheques presented at New Delhi, Mumbai, Kolkata and Chennai and payable at any of the other three Metro centers: Maximum period of 7 days.
b. Cheques drawn on other Metro Centers and Urban Centres (other than those of North Eastern States and Sikkim): Maximum period of 10 days.
c. Cheques drawn on all other centres: Maximum period of 14 days.
ii. Where IndusInd Bank does not have a branch:
- Cheque drawn on Metro and Urban centres (other than those of North Eastern States and Sikkim): Maximum period of 10 days.
- Cheques drawn on all other centres: Maximum period of 14 days.
2.3.2 Cheques/ Instruments payable in Foreign Countries:
Cheques drawn on foreign countries are accepted for collection on the `best effort basis’. Bank would release funds to the party on credit of proceeds to the bank’s Nostro Account with the correspondent bank after taking into account normal cooling period.
- Cooling period is 15 international working days from the date of credit (value date) to our Nostro Account.
- The exchange rate (TT Selling) prevailing as on the date of application of fund and credit to Customer account will be applied
- The date of credit to account will be reckoned considering the value date of credit to Nostro account plus normal cooling period as stipulated above.
3 Payment of Interest for delayed Collection
3.1 Cheques/ Instruments payable at Centres within the Country
The bank will pay interest on the amount of collection instruments in case there is delay in affording credit beyond the stipulated time period mentioned above 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 for the purpose of payment of interest on delayed collection.
Interest for delayed collection shall be paid at the following rates: - Savings Bank rate for the period of delay beyond the stipulated Time Frame for collection of Outstation Cheques/ Instruments.
- Where the delay is beyond 14 days over and above stipulated Time Frame, interest will be paid at the rate applicable for term deposit for the respective period.
- In case of extraordinary delay, i.e. delay exceeding 90 days, interest will be paid at the rate of 2% above the corresponding Term Deposit rate.
- In the event the proceeds of cheque under collection were to be credited to an overdraft/loan account of the Customer, interest will be paid at the rate applicable to the loan account. For extraordinary delays, interest will be paid at the rate of 2% above the rate applicable to the loan account.
3.2 Cheques drawn on Foreign Countries
The time taken for realization of US Dollar instrument payable in USA ranges from 7-10 days to as high as 30-45 days depending up on the collection arrangement and place at which the instrument is payable. The diversity in Banking and payment system in USA and complexities in law governing the cheque transactions have significant bearing on collection time. As per the existing US regulations the return liability would last for 1 year for altered cheque and 3 years for forgeries. Cooling period is the time the bank wait for after obtaining the provisional credit for the amount of cheque for possible return of the cheque by the payee bank under the provision of US law before giving credit to the party.
Hence, Bank will not compensate the Customer for delays in collection of cheques designated in foreign currencies sent to foreign countries. Similar is the situation for other than US dollar instruments and countries other than USA also. The time norms for return of instruments cleared provisionally, also vary from country to country. 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 as per the FEDAI guidelines. Such compensation will be given for delays beyond the day when the amount is due for credit after taking into account normal cooling period stipulated.
The compensation in such cases will be as per FEDAI guidelines, as follows:
- For cheques/instruments upto an amount equivalent to Rs. 1 lakh: If the proceeds are not paid within 10 days from the due date (value date of credit to Nostro account plus normal cooling period), we shall pay interest for the delayed period @ 2% over the applicable Savings bank rate of interest.
- For cheque/ instruments exceeding an amount equivalent to Rs.1 lakh: If the proceeds are not paid within 3 working days (reckoning Saturday as a working day) from the due date (value date of credit to Nostro account plus normal cooling period), we shall pay interest for the delayed period @ 2 % over the applicable Savings bank rate of interest.
- Compensation for any possible loss on account of adverse movement in foreign exchange rate.
4 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 of the 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 cheques.
In such cases the bank will compensate for any interest loss/ payment of charges by the Customer, due to deficiency in service on our part for any act of omission or commission directly attributable to the bank and the compensation in such cases would be as follows:
- In case intimation regarding loss of instrument is conveyed to the Customer beyond the time limit stipulated for collection 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.
- The bank would also compensate, any reasonable charges the Customer 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.
5 Charging of Interest on cheques returned unpaid:
5.1 Instant Credit and Purchase of Local / Outstation cheques: If a cheque/ instrument sent for collection for which the bank provided immediate credit or purchased is returned unpaid, the value of the cheque will be immediately debited to the account. The Customer will not be charged any interest from the date immediate credit/ purchase 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 as per banks guidelines on the notional overdrawn balances in the account had credit not been given initially.
If the proceeds of the cheque were credited to the Savings Bank Account and were not withdrawn, the amount so credited will not qualify for payment of interest when the cheque is returned unpaid. If 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.
5.2 Credit given for cheques drawn on Foreign Countries:
Foreign Correspondent Bank returning foreign currency cheque / instruments at any time by reason of the said foreign currency cheques / instruments being forged and not genuine or otherwise for any reason, the Customer has to reimburse at any time on demand the amount of the said cheque / instruments and also the amount or aggregate amounts of all claims including costs, legal or otherwise, paid by any person including our collecting bank, office, correspondent or agent may be called upon or compelled to pay including the difference in exchange due to the fluctuation of the exchange rates, together with commission and interest at a rate to be determined by us and any expenses whatsoever incurred by us or any person including our collecting bank, office, correspondent and any other such concerned Party.
6 Force Majeure
The bank shall not be liable to compensate Customers for delayed credit if some unforeseen event (including but not limited to civil commotion, sabotage, lockout, strike or other labour disturbances, accident, fires, natural 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, prevent it from performing its obligations within the specified service delivery parameters.
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