CHEQUE COLLECTION POLICY
STATE BANK OF INDIA CHEQUE COLLECTION POLICY – 2015
1.1. Bank's Cheque Collection Policy (CCP) was first formulated in 2005 and is reviewed periodically, as per the guidelines issued by Reserve Bank of India (RBI)/IBA/BCSBI from time to time. The Policy duly approved by Bank's Central Board shall be known as Bank's Cheque Collection Policy -2015.
1.2. Bank's Cheque Collection Policy-2015 has been formulated as a comprehensive document with transparency, covering following aspects, taking into account our technological capabilities, systems and processes adopted for clearing arrangements and other internal arrangements for collection through different methods. The Policy takes adequate care to ensure that the interests of small depositors are fully protected and is in line with the IBA's model policy on Collection of cheques/instruments. The procedure for collection of domestic cheques/instruments and international instruments has been included herein, which, inter alia, incorporates the following:
a) Established procedure for collection of Bank's own cheques (local and outstation).
1.3 Cheque clearing process under revised scenario of CTS based clearing system.
1.3.1 The printing of IOI instruments is also now migrated on "CTS-2010 standard" platform.
1.3.2 Cheque Truncation System (CTS) is presently working at Northern grid in Delhi, Southern Grid in Chennai and Western grid in Mumbai.
1.3.3 States/Circles covered in Grid based CTS-2010 centres:
Northern grid in Delhi covers Bihar, Chandigarh, Delhi, Haryana, Jammu& Kashmir, Jharkhand, Rajasthan, Uttar Pradesh & Uttarakhand states (Covering Chandigarh, Delhi, Lucknow and Patna Circles). Centres covered are Agra, Amritsar, Allahabad, Bhilwara, Chandigarh, Dehradun, Delhi, Gorakhpur, Jaipur, Jalandhar, Jamshedpur, Jammu, Jodhpur, Kanpur, Kota, Lucknow, Ludhiana, Patna, Ranchi, Udaipur and Varanasi,
Southern grid in Chennai covers Andhra Pradesh, North Eastern States, Orissa, Karnataka, Kerala, Tamilnadu & West Bengal states (covering Bangalore, Bhubaneswar, Chennai, Guwahati, Hyderabad, Kolkata and Thiruvananthapuram circles). Centres covered are Bangalore, Belgaum, Bhubaneswar, Calicut, Chennai, Coimbatore, Cuttack, Ernakulum, Erode, Guwahati, Hubli, Hyderabad, Kolkata, Madurai, Mangalore, Mysore, Pondicherry, Salem, Thirunelvelli, Tiruchirapalli, Tirupur, Trichur, Trivandrum, Vishakhapatnam and Vijayawada.
Western grid in Mumbai covers Chhattisgarh, Goa, Gujarat, Madhya Pradesh, and Maharashtra states (covering Ahmedabad, Bhopal and Mumbai Circles). Centres covered are Ahmedabad, Anand, Aurangabad, Bhavnagar, Bhopal, Gwalior, Indore, Jabalpur, Jamnagar, Kolhapur, Mumbai, Nagpur, Nasik, Pune, Panaji, Rajkot, Raipur, Solapur, Surat and Vadodara.
All centres covered under the same grid will be treated as a single clearing zone and cheques drawn on these centres and presented at any of the grid centres are treated as locally drawn cheques in as much as no clearing charges would be applicable for such cheques.
1.3.4 Separate clearing session was introduced in the three CTS grids (Mumbai, Chennai and New Delhi) for clearing of such residual non-CTS-2010 cheques (including PDCs and EMI cheques) with effect from 1st January 2014. This separate clearing session initially operated thrice in a week (Monday, Wednesday and Friday) upto 30th April, 2014.Thereafter, the frequency was reduced to twice a week upto 31st October, 2014 and further to weekly (every Monday) from 1st November 2014 onwards.
1.3.5 After introduction of these special sessions for non-CTS cheques, drawee bank returns the non-CTS cheques, if presented in regular CTS clearing, with reason "37- present in proper zone", which will have to be re-presented by the collecting bank in the immediate next special clearing session.
1.3.6 RBI has directed that no changes/corrections should be carried out on the cheques. For any changes in the payee's name, courtesy amount (amount in figures) or legal amount (amount in words) etc. fresh cheque forms should be used by customers. This will help Banks to identify and control fraudulent alterations. Collecting banks have to ensure that such cheques are not accepted for presentation in CTS. It is not applicable to cheques cleared under other clearing arrangements such as MICR clearing, non-MICR clearing, over the counter collection (for cash payment) or direct collection of cheques outside the Clearing House Arrangement.
1.3.7 Clearance of Govt. cheque is presently under "paper to follow" system at CTS and other clearing centres. However, RBI proposes to introduce CTS for Govt. Cheques also. Upon receipt of RBI instructions the Bank would modify its systems suitably.
1.4 Process for clearing at clearing centres: All Banks participating at clearing centres have been provided with Express Cheque Clearing System (ECCS) software and a server is located at Clearing House, where all bank branches exchange their cheques and also submit the data of cheques presented in clearing to Clearing House by removable storage devices. The Clearing House has ECCS software of Clearing House module, which processes the data received from the member banks and generates Bankwise report and settlement report. The settlement bank makes settlement, based on the ECCS report in accounts maintained with the bank. All provisions of Uniform Rules and Regulations for Bankers' Clearing House (URRBCH) issued by RBI are adhered to by the Clearing House.
1.5 Speed Clearing System: - Outstation cheques drawn on banks participating in speed clearing at specified locations will be collected and treated at par with local cheques. All terms and conditions applicable for local clearing instruments will also apply to speed clearing system, except that such cheques will be collected by the collecting bank against realization of service charges specified for the purpose by the RBI. Speed Clearing System is applicable for both CTS-2010 grid based clearing system and non-CTS clearing system.
1.6 The list of objections for return of Instruments and Image based Cheque Clearing, as detailed in Annexure D to Uniform Regulations and Rules for Bankers' Clearing House, has been placed as Annexure-I of this document.
1.7 Cheque return charges shall, however, be levied only in cases where the customer is at fault and is responsible for such returns. The list of reasons for return, where the customers are not at fault is as per Annexure-II.
1.8 Cheques that need to be re-presented without any recourse to the payee shall be presented in the immediate next presentation clearing, not later than 24 hours(excluding holidays),with due notification to the customers of such presentation.
1.9 Dishonour /Return of cheques: Bank needs to mention the ‘Date of Return' & sign/initial the Cheque Return Memo and the objection slip is to be signed/initialed, giving therein a definite and valid reason for refusing payment as prescribed in Rule 6 of the Uniform Regulations and Rules for Bankers' Clearing Houses (URRBCH). This will enable the holder of the instrument to have legal recourse against the drawer of the cheque.
1.10 Collection of Third Party Cheques in clearing: RBI has prohibited Banks from crediting ‘account payee' cheques to the account of any person other than the payee named therein. However, with a view to mitigating the difficulties faced by members of co-operative credit societies in collection of account payee cheques, RBI has permitted banks to collect for such societies account payee cheques drawn for an amount not exceeding Rs.50,000/- on behalf of their constituents.
1.11 Cheques deposited at branch counters and Cheques deposited in the drop-box within the branch premises, before the specified cut-off time, will be sent for clearance on same day, for which the clearance period will be T+1 working day. Cheques deposited after this cut off time will be sent for clearing on next day, for which clearance period will be T+2 working days.
1.11.1 The broad time–limit for receipt of cheques (say up to 3 hours after opening of branch, 1 hour before closure of business etc.), which may be finetuned for individual locations/branches, based on local practices, will be fixed by the Controllers of the respective branches.
1.11.2 All drop-boxes shall clearly indicate the timeline as above upto which cheques dropped in the drop boxes would be sent for clearing on the same day.
1.11.3 Cheques deposited after the cut-off time and in drop-boxes outside the branch premises including off-site ATMs will be presented in the next clearing cycle.
1.12 As a policy, Bank would give credit to the customer account on the same day after day's clearing settlement takes place. Withdrawal of amount so credited would however be permitted as per the cheque return schedule of the clearing house.
1.13 The timeline for clearing of local cheques will be extended by an additional day in case of branches having non-Sunday weekly off and for 7 days branches, where branches are functioning on Sunday.
1.14 Bank branches situated at centres where no clearing house exists, would present local cheques on drawee banks across the counter and proceeds thereof would be credited, at the earliest, on realization.
1.15 Normal collection charges will be levied for local cheques not collected through clearing, irrespective of the amount of cheques.
1.16 SC/DDP automation has been implemented for collection of outstation cheques of other banks from centres where speed clearing system is not available.
1.17 In the case of collection of outstation cheques at centers, where the Speed Clearing System is not applicable, the collecting and paying bankers have to share 50:50 charges for collection of outstation cheques.
1.18 Negotiation of local cheques/instruments drawn on other banks will not be encouraged. However, Branch Managers may use their discretion in exceptional circumstances (business exigencies) to permit drawals against uncleared effects up to Rs. 30,000/- (Rupees thirty thousand only), in deposit accounts. The facility can be provided only on well conducted, KYC compliant accounts as mentioned in paragraph
2.2.1 below. This will be done within the discretionary powers vested with the Branch Manager in the respective Grade/Scale, as per discretionary power structure, on the day of purchase itself and is required to be reported to the next higher authority, immediately.
1.19 In case of outstation cheques, the facility will be restricted to one or more cheques for aggregate amount not exceeding Rs. 30,000/- at a time, ensuring that the liability on account of outstanding cheques purchased does not exceed Rs. 30,000/- at any time, except in cases where credit facility against cheques to be purchased has been duly sanctioned by the competent authority.
1.20 If a cheque/instrument for which immediate credit has been afforded is returned unpaid, Bank shall recover interest at clean overdraft rate for the period Bank remained out of funds and also cheque return charges, subject to the following :-
a) Bank will charge interest from the date of credit of proceeds of the cheque in the account till reimbursement/realization of the amount to/by the Bank.
b) Where the cheque is credited to a Savings Bank account, such credits will not be reckoned for interest purposes if the cheque is returned unpaid.
c) 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 cheque/instrument.