CHEQUE- COLLECTION - POLICY

 

 

INTRODUCTION:

 

The cheque collection policy of The Kangra Cooperative Bank Ltd. 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 use increased technology to provide quick collection services to its customers .The policy documents covers the following aspects.

 

·        Collection of local / outstation cheques.

·        Time frame for collection of local / outstation cheques.

·        Cheques lost in transit / in clearing process.

·         Interest payment for delayed collection.

 

DEFINITION:

 

Collection can be defined as the process of clearing instruments on behalf of the customers. The instruments cover:

 

·        Cheques /Demand Drafts / Pay orders drawn in the same city / clearing zone of collection as the drawer bank branch.

·        Cheques /Demand Drafts / Pay orders drawn in a city /clearing zone other than the drawer bank branch.

 

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 the branch counters and in collection boxes with in the branch premises before the specified cut off time will be presented for clearing on same day .The cut off time varies from branch to branch. The applicable cuts off timings are displayed on the cheque drop box in branches for the benefit of the customers.

          Cheques deposited after the cut off time at the counters and in the collection boxes of the branches will be presented on the next day clearing cycle. As a policy, bank would give credit to the account on the day of clearing settlement and after receiving cheque return schedule of the clearing house. At present this credit is given on second day and withdrawal of amount so credited is also available on the same day .

 

1.2     HIGH VALUE CLEARING

 

         High value clearing facility is not available in the bank.

                                                                                     

1.3             Outstation cheques payable in India

 

Proceeds of outstation cheques will be credited to customer account as per the norms below.

 

·         The bank does not have its own branches outside Delhi /New Delhi, therefore instruments would be directly sent for collection to the drawee bank or collected through a correspondent bank. At present Bank has tie-up with HDFC bank as correspondent bank for this collection. In addition bank would also use the National Clearing Services offered by the RBI at centre where such collection services exist.

 

·        Cheques drawn on metro and other major cities which are covered under National clearing service are collected through this service and    funds will be credited to the customers account within seven working days.

 

·        Cheques drawn on non metro cities where HDFC bank has a branch, credit will be given on receipt of funds. Funds will be credited to the client account as soon as possible. In such locations where HDFC bank has branched credit will be given in the customers account within Eight to ten working days. This period   is not applicable to north eastern states, Sikkam and other tribal areas of the country.

 

·        In case of cheques drawn on such locations where Correspondent i.e HFDC bank does not have branch then cheques will be sent directly to drawee branch through registered post or through courier and proceeds will be credited to the customers account as soon as it is received from the drawee branch. Normal period for such clearance is twenty one working days.

·        Bank will charge normal collection and out of pocket charges from customers for out station cheque collection.

 

1.4      Cheques  payable in Foreign Countries

 

·        Cheques payable at foreign centre where the bank has correspondent banking arrangement will be collected through correspondent bank. At present bank has arrangement with Allahabad Bank for such collections. Proceeds of such receipts will be credited to the account as soon it is received from the correspondent bank and normal time taken for such transaction is between thirty to forty working days.

 

2.     CHEQUE/INSTRUMENT LOST IN TRANSIT IN CLEARING            

          PROCESS OR AT THE PAYEE BANKS 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 banks branch.

 

·        The bank shall immediately on coming to know of   the loss, bring the same to the notice of the account holder. The bank will  ask the account holder to  inform the drawer to record stop payment and also take care that cheque  issued by him/ her are not dishonored due  to non credit of the amount of the instrument. The bank would provide all possible assistance to the customer to obtain a duplicate instrument from the drawer of the cheque like giving a certificate that it was lost etc.

 

·        The bank would also compensate the customer with reasonable charges he or she incurs in getting duplicate cheque / instrument upon production of receipt, in the event the instrument is to be obtained from a bank /institution that would charge a fee for issue of duplicate cheque / instrument.

 

 

 

 

 

 

 

3.     COMPENSATION POLICY: INTEREST PAYMENT FOR      DELAYED COLLECTION

 

As part of compensation policy, interest will be paid to the customers on the amount of the collection instrument, in case there is delay in giving credit beyond the time period mentioned above.             

 

Interest for delayed collection shall be paid at the following rates:

 

i)        In case of abnormal delay i.e. delay beyond 45 days interest will be paid as per saving interest rate for the respective period.

 

ii)       In the 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.

 

iii)      Interest as above will not be payable if the cheques / instruments are delayed by drawee branch. On account of any unjustified delays on part of the drawee bank in sending the proceeds to the collecting bank then bank would not be liable to pay any compensation to the customer.

 

iv)     Bank would share / notify the reasons and other related facts of delay by drawee bank with the customer.

 

4.      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 “ Act of God”, war, damage to banks facilities or of its correspondent bank’s, absence of usual means of communication  or all types of  transportation etc beyond the control of the bank prevents it from  performing its obligations within the specified service delivery   parameters.