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CHEQUE COLLECTION POLICY
ARRANGEMENTS FOR COLLECTION OF DOMESTIC CHEQUES. (CTS-2010 STANDARD CHEQUES AND NON-CTS -2010 STANDARD CHEQUES)
PROCEDURE FOR COLLECTION OF INTERNATIONAL CHEQUES/INSTRUMENTS
REASON FOR RETURN
TYPES OF SETTLEMENT PROCESSES IN OTHER COUNTRIES
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CHEQUE COLLECTION POLICY

REVISION OF EXISTING POLICY

The Cheque Collection Policy has since been revised wef 13th November 2013. The revised Policy, covers the following aspects:-

·     (A) ARRANGEMENTS FOR COLLECTION OF DOMESTIC CHEQUES. (CTS-2010 STANDARD CHEQUES AND NON-CTS -2010 STANDARD CHEQUES)

 

·     (B) PROCEDURE FOR COLLECTION OF INTERNATIONAL CHEQUES/INSTRUMENTS

 

·     (C) REASON FOR RETURN

 

·     (D) TYPES OF SETTLEMENT PROCESSES IN OTHER COUNTRIES

 


PREAMBLE:

1.1.        Bank's Cheque Collection Policy (CCP) was first formulated in 2005 and is reviewed annually, 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 read as Bank’s Cheque Collection Policy -2013. 

1.2.    Bank’s Cheque Collection Policy document 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 this has been integrated with the Deposit Policy formulated by the Bank in line with the IBA’s model policy on Collection of cheques/instruments. The procedure for collection of domestic cheques/instruments and international instruments have been placed in Annexure-I & II respectively, which, inter alia, incorporate the following: 

a)    Established procedure for collection of cheques (local and Outstation).

b)    Collection of cheques between two banks and between CBS and non-CBS branches of other banks.

c)    Reduced time frame for collection of outstation/local cheques drawn on branches of the Bank

d)    Penalty for delayed collection for local/outstation cheques in a progressive manner

e)    Amounts of cheques up to which immediate credit is to be provided.   

1.3     The Cheque Collection Policy covers following guidelines issued by the regulators for smooth conduct of clearing cycle.        

Cheque Clearing process under revised scenario of CTS based clearing system: 

1.3.1        Cheque Truncation System (CTS) is presently working at Northern grid in Delhi, Southern Grid in Chennai and Western grid in Mumbai.  

1.3.2        States/Circles covered in Grid based CTS-2010 centres: 

            Northern grid in Delhi covers Delhi and NCR (Delhi Circle).

 

Southern grid in Chennai covers Tamilnadu, Andhra Pradesh,   Kerala, Karnataka, Orissa, West Bengal, North Eastern States, (covering Chennai, Hyderabad, Bangalore, Thiruvananthapuram, Bhubaneswar, Kolkata and Guwahati circles). Centres covered are Calicut, Trichur, Trivendrum, Ernakulam, Hubli, Mysore, Bangalore, Belgaum, Bhubaneswar, Cuttack, Chennai, Thirunelvelli, Pondicherry, Tiruchirapalli, Tirupur, Coimbatore, Madurai, Erode, Salem, Kolkata, Guwahati, Vishakhapatnam, Hyderabad and Vijayawada. 

 

            Western grid covers Maharashtra, Goa, Madhya Pradesh and Gujarat (Mumbai, Bhopal and Ahmedabad Circles). Centres covered are Panaji, Solapur, Mumbai, Nasik, Kolhapur, Nagpur, Pune, Vadodara, Surat, Bhavnagar, Rajkot, Ahmedabad, Anand, Raipur, Jabalpur, Gwalior and Bhopal.

 

1.3.3.     Process of clearing in ECCS centre: All Bank branches participating in ECCS clearing centres have been provided with 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 individual bank’s report and settlement report. The settlement bank makes settlement based on the ECCS report in accounts maintained with the bank. All other provisions of Uniform Rules and Regulations for Bankers’ Clearing House (URRBCH) issued by RBI are being adhered to by the Clearing House.

 

1.4            Non-CTS-2010 cheques would continue to be cleared through “Express Cheque Clearing System (ECCS)”.

1.5       Timeline for withdrawal of residual “non-CTS-2010 standard” cheques has been extended from 31st July 2013 to 31st December, 2013.

1.6       Separate clearing session will be introduced in the three CTS centres (Mumbai, Chennai and New Delhi) for clearing of such residual non-CTS-2010 cheques (including PDC and EMI cheques) with effect from 1st January 2014. This separate clearing session will initially operate thrice in a week (Monday, Wednesday and  Friday) upto 30th April, 2014.Thereafter, the frequency will be reduced twice a week upto 31st October, 2014 and further to weekly (every Monday) from 1st November 2014 onwards.

1.11     The SC/DDP automation has been implemented for collection of outstation cheques of other banks where speed clearing system is not available in the clearing process.

1.12     The IOI instrument is also now migrated to printing on “CTS-2010 standard” platform.

1.13     Speed Clearing System for collection of outstation cheques has been introduced by RBI at all MICR centres. It has further been extended at non-MICR clearing centres by RBI in a phased manner where automated clearing system is in vogue.

1.14     Clearance of Govt. cheque is under “paper to follow” system at CTS and other clearing centres.

1.15     Bank has stipulated the compensation at the rate of savings bank interest rate for delay in clearance of local cheques beyond the normal period.

1.16     Cheque return charges shall 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 are indicated in the Annexure-III.

1.17     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-IV of this document.

1.18     Cheques that need to be re-presented without any recourse to the payee, shall be made in the immediate next presentation clearing not later than 24 hours(excluding holidays)with due notification to the customers of such presentation through SMS alert, email etc.

1.19     RBI 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. excepting change in the date for validation period, fresh cheque forms should be used by customers. This will help bank to identify and control fraudulent alterations. It is also applicable for the instruments presented in clearing at CTS-2010 grid based clearing centres. 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.

1.20     Reduction of validity of cheque /draft /pay order/Banker’s cheque from 6 months to 3 months w.e.f. 01.04.2012.

1.21     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/initialled 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.

1.22     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 mitigate the difficulties faced by the members of co-operative credit societies in collection of account payee cheques, RBI permitted banks to collect for such societies account payee cheques drawn for an amount not exceeding Rs.50,000/- on behalf of their constituents.

1.23     The payment of compensation to the customers on account of delay in collection of outstation cheques is to be paid to the customer without any request from him.

1.24     The realization of service charges has been system enabled for automatic recovery of service charges.




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