PROCEDURE FOR COLLECTION OF INTERNATIONAL CHEQUES/INSTRUMENTS

7. Procedure For Collection Of International Cheques/Instruments :

7.1 The Bank handles, on behalf of its customers, at all its branches, collection of cheques drawn in various foreign currencies and payable at various foreign centers. The bulk of the collection instruments are: -

a) US$ cheques {including Travellers Cheques (TCs)} payable in USA.
b) £ cheques (including TCs) payable in UK.
c) € cheques (including TCs) payable in Euro countries.
d) Cheques denominated in US$ & €, payable in countries other than USA/Euro Countries.
e) Cheques denominated in Australian Dollar, Canadian Dollar and Singapore Dollar payable in their respective countries.
f) It is clarified that Travellers cheques issued by various Banks/Entities in various currencies will continue to be paid (by purchase) at designated branches as per bilateral arrangement in place, as advised by Global Markets (Foreign Department), Kolkata, from time to time.
g) Sale of American Express Travellers Cheques (AMEX FCTCs) has been discontinued w.e.f. 01.09.2012.

7.2 Accordingly, the Policy for International Cheque Collection shall cover the following aspects:

i) Type of settlement process in foreign countries for collection of cheques. ii) Arrangement for collection of cheques/instruments.
iii) Time–frame for collection of cheques.
iv) Interest payment for delayed collection, and
v) Collection instruments lost in transit.

7.3 Settlement Process in Foreign Countries for collection of cheque:

Collection of cheques at various foreign centers differs vastly from the process prevalent in India, both in advanced markets and developing countries and also from country to country within these two sub-groups. In some of the markets, clearing / settlement system can take more than 1 day, i.e. 2-4 days for return clearing and, therefore, for final funds settlement. Further, in some countries like USA the recall of funds from the collecting banker can occur even after the time for return clearing for an undefined period (normally up to one month), in cases where National Clearing involves more than one Fed Zone. There are also countries like Germany where cheques are no more the preferred mode of payments (replaced by online payments) and clearing takes place on a weekly basis. A brief description of different types of settlement processes prevailing in foreign countries has been given in Annexure III.

7.4 Arrangement for collection of foreign cheques/instruments: -

7.4.1 We have a network of branches, link branches and Global Link Services Department of International Banking Group (IBG), which use services of different correspondent banks with large volumes, robust systems, suitable technology back up and country specific strengths to provide efficient service at competitive prices. Different Correspondent Banks are able to offer varied customized products to us for risk reduction, quicker collection, improved reconciliation etc. at various price points. When FCNR (B)/NRE TDR deposit receipt is to be issued, as delay in Nostro Credit will adversely affect the value date (value date is the date of credit in NOSTRO A/c) of the deposit, branches have to ensure that:

i) FCNR (B)/ NRE TDR Receipt should be mailed / handed over to the depositor only after the cooling period is over.

ii) As no protection against frauds on the face of cheques is available in such cases (a recall is possible within 1 year), the facility of loans, etc. against such cheques/instruments should be extended only where branches are satisfied with the bonafides of the transaction and availability of recourse, if required.

7.4.2 The USD, GBP,CAD & EURO cheques drawn on banks in USA, UK,CANADA and European countries respectively are accepted by Global Link Service, Mumbai for collection and cheques on these currencies drawn elsewhere as well as cheques of other currencies are required to be sent directly to the drawee bank.

7.5 Immediate credit of cheques to deposit accounts of individuals:-

7.5.1 Authorised branches of the Bank will offer immediate credit of cheques drawn in foreign currency for satisfactorily conducted accounts complying with KYC norms where they are satisfied with the scope for recourse, if required, and the customers are willing to pay the cheque purchase charges.

In value terms, cheque purchases for issue of Rupee TDRs may be authorized by Managers/Branch Managers in Scale III/IV incumbencies for a Rupee equivalent up to Rs. 50,000/- (Rupees fifty thousand only) and by AGM branch/ AGM Region for higher values in satisfactorily conducted accounts, as per paragraph 2.2.1 above, subject to their discretionary power. In all other cases, the discretionary power to purchase cheques, in aggregate for a particular customer, will be as per the laid down financial powers for clean instruments, subject to usual reporting to the next higher authority.

7.5.2 If a cheque/instrument, for which immediate credit has been afforded, is returned unpaid, the Bank shall recover interest at clean overdraft rate for the period the Bank remained out of funds and also cheque return charges and exchange loss, if any, subject to the following:

i) The Bank will charge interest from the date of credit of proceeds of the cheques in the account till reimbursement of money to the Bank.

ii) Where the cheque is credited to a Savings Bank account, such credits will not be reckoned for interest purposes if the cheque is returned.

iii) If proceeds are credited in an overdraft/loan account, interest would be recovered at applicable rate/clean overdraft rate, whichever is higher, on the amount of returned cheques/instruments.

7.6 Time Frame for collection of instruments:-

The time frame from the date of deposit of a cheque at a branch to the date of credit to the customer's account for USD, Euro, £ Sterling, Australian $, Canadian $, cheques/instruments payable in their home countries will be 10 days from the date of clear credit, including cooling period or 45 calendar days, whichever is earlier, and for all other instruments (i.e. for instruments drawn on other countries) it will be 10 days from the date of clear credit or 60 calendar days, whichever is earlier. The timeframe mentioned above is the outer limit and once the instruments are realized, subject to expiry of the relevant cooling period, if any, proceeds will be credited to the customer's account.

7.7 Interest payment for delayed collection:-

7.7.1 Delay in collection of cheques payable at foreign centres will be construed if the customer's account is not credited within 10 working days, excluding Saturdays, from the date of clear credit to the Bank's Nostro account, i.e. after taking into account the prescribed cooling period for that currency, with the correspondent.

7.7.2 The Bank however, will not compensate the customer for delays in collection of cheques drawn on banks in foreign countries 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 differs 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.

7.7.3 For the sake of uniformity and clarity, the date of Clear Credit is defined as the date on which clear funds are available in our Nostro Account after an actual or notional cooling period – for actual credit to customers' account as per Bank's agreement with the concerned Correspondent Bank. Wherever there is no specific agreement on the cooling period or the funds are directly collected from a paying bank, the Clear Credit Date will be after observing a cooling period, as per the discretion of the Bank, for that specific currency/country/clearing system, but not exceeding 10 calendar days from the date of actual credit to Bank's Nostro Account.

7.7.4 The compensation on account of delay in collection of instruments in foreign currency will be paid in Indian Rupee, as detailed below:

i) At Savings Bank rate, if the period of delay is beyond prescribed collection period, i.e. after 10 days from the cooling period (as mentioned in Para 7.7.3 above) and upto 45 days, where proceeds of the instruments are to be credited to deposit accounts

ii) In case of abnormal delay, i.e. delays exceeding 45 days, interest will be paid at term deposit rate applicable for the period and for delays beyond 90 days, 2%above the applicable term deposit rate.

iii) In the event of the proceeds of cheque under collection being required to be credited to an overdraft / loan account of the customer, interest will be paid at the rate applicable to the loan account, if the delay is less than 45 days. For abnormal delays, i.e. beyond 45 days, interest will be paid at the rate of 2 % above the applicable interest rate to the loan account. Such interest shall be payable with a minimum of Rs. 25/-.

7.7.5 Compensation as detailed above shall be paid without any formal demand from customers.

7.7.6 No separate compensation is payable by the Bank on account of movement in the value of the respective currencies.

7.7.7 International Cheques/instruments lost in transit/in clearing process :

In the event an international cheque or an instrument accepted for collection is lost in transit or in the clearing process, the Bank shall, immediately on coming to know of the loss of an instrument, bring the same to the notice of the account holder so that the drawer can be informed to record stop payment. The Bank would also advise the correspondent/drawee bank all particulars of lost cheques/ instruments for exercising caution and provide all assistance to the customer in obtaining a duplicate instrument from the drawer of the cheques, if required. The Bank will endeavour to get payment of the instrument based on the photocopy/scanned image of the instrument, wherever the practice is prevalent. The Bank will bear the actual charges of recording Stop Payment instructions levied by drawee bank. The Bank will also reimburse the customer with actual charges levied by the drawer / bank in issuing duplicate cheques/instrument, subject to a maximum of Rs.250/-.

8. FORCE MAJEURE:

Bank shall not be liable to compensate the customers for delayed credit if some unforeseen event (including, but not limited to civil commotion, sabotage, lockout, strike or other labour disturbances, accident, fire, natural disasters or other "Acts of God", war, damage to the Bank's facilities or of its correspondent bank(s), beyond the control of the bank) prevents it from performing its obligations within the specified service delivery parameters.