1. PREAMBLE

Keeping in view the technological progress in payment and settlement systems and the qualitative changes in operational systems and processes that have been undertaken by a number of banks, the Reserve Bank of India had, with effect from 1st November 2004, withdrawn its earlier instructions to commercial banks on
(i) Immediate Credit of local/outstation cheques,
(ii) Time Frame for Collection of Local / Outstation Instruments and
(iii) Interest Payment for Delayed Collection. The withdrawal of these mandatory guidelines was expected to enable market forces of competition to come into play to improve efficiencies in collection of cheques and other instruments. The withdrawal of RBI instructions to Banks on time frame & payment of interest has offered bank further opportunity for increasing efficiency.

The Policy brings out the obligations of the bank to the customers and the rights of the customers on collection of local/outstation/foreign currency denominated cheques/instruments and related issues.

POLICY OBJECTIVES

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 policy document covers the following aspects:

Collection of cheques and other instruments (including Speed Clearing) payable locally, at centres within India and abroad.

Immediate credit of cheques.

Our commitment regarding time norms for collection of instruments.

Policy on payment of interest in cases where the bank fails to meet time norms for realization of proceeds of outstation instruments.

Our policy on dealing with collection instruments lost in transit.

Dealing with frequent dishonour of 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 sent 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 sent in the next clearing cycle. As a policy, bank would give credit to the customer account on the same day clearing settlement takes place. Withdrawal of amounts so credited would be permitted on 2nd day or 3rd day as per the cheque return schedule of the clearing house. Wherever applicable, facility of high-value clearing (same day credit) will be extended to customers.

Cheques drawn on our CBS branches will be credited in the customers account at UCO Bank on the same day.

In case of cheques deposited in loans and advances accounts including term loan,  value date credit will be given on day one or day two as the case may be  (i.e. the day on which settlement of the bank with RBI/SBI is credited depending on clearing cycle at the place) for the purpose of calculation of products for application of interest, so that the customer gains interest benefit simultaneously on the amount debited to his/her deposit account. In case of immediate credit afforded as per para 2.4 of the cheque policy and withdrawal on or before day two or day three shall be treated as withdrawal against effects and applicable interest shall be charged for said intervening days between withdrawal and actual credit to the account. 

Bank branches situated at centres where no clearing house exists, would present local cheques on drawee banks across the counter and it would be the bank’s endeavour to credit the proceeds at the earliest.

The cheques  received upto   cut-off time shall be sent on the same day to the local clearing house. The cut-off time shall be displayed by each branch across their counters and also on the drop box placed inside the branch premises. For High Value clearing and for credit to Govt. Accounts like Income Tax etc., a similar cut-off time notice to be displayed.

In case of Non-CBS environment/Non-Networked Centres, cheques (legend “CBS” missing on the cheque) drawn on other banks at outstation centres will normally be collected through bank’s branches at those centres. Where the bank does not have a branch of its own, 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 centres where such collection services exist.

RBI has introduced Speed Clearing Service at the identified centres for settlement of payments of outstation cheques drawn on Core Banking enabled branches through local clearing at the identified centre where the cheque(s) is lodged by a customer. Since our Bank has  rolled over to 100% CBS, we shall provide the Speed Clearing Service at the identified centres where we have our presence. It will facilitate collection of cheques drawn on outstation core banking enabled branches of member Banks if they have a networked branch at the centre on which  the outstation cheque is drawn.    

Cheques drawn on bank’s own branches at outstation centres will be collected using the intersol arrangement in vogue. As our branches  are connected through a centralized processing arrangement and we are offering “Anywhere Banking Services” to our  customers,  same day credit to the  customers will be effected in respect of outstation instruments drawn on any other bank whose outstation branch is also under  CBS network and participating in the Local Clearing House.

2.3 Immediate Credit of Local / Outstation Cheques /  Instruments :

Branches / extension counters of the bank will  provide immediate credit for outstation cheques / instruments up to the aggregate value of Rs.15000/- (upto Rs.25000/- in respect of Demand Drafts/Pay Orders/Interest/Dividend warrants drawn on our Bank/Branches and cheques issued by Govt. undertakings)  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 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 centres where no formal clearing house exists.

The facility of immediate credit will be available to individual account holders only and shall be offered in 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. However, separate pay-in-slip (DS-2A) may be used for the purpose of immediate credit of outstation/local cheques.

For the purpose of the Policy, a satisfactorily conducted account shall be –

a) The account should be properly introduced, norms of KYC complied with and opened at least 6 months earlier.

b) Conduct of which has been satisfactory and bank has not noticed any irregular dealings.

c) Where no cheque / instrument for which immediate credit was afforded,
returned unpaid for financial reasons.

d) Where the bank has not experienced any difficulty in recovery of any amount advanced in the past including cheques returned after giving immediate credit.

The total amount of all such cheques credited to the account but not realized should not exceed the maximum limit prescribed for immediate credit. In other words total exposure of the Bank in respect of unrealized cheques credited to the account should not exceed the maximum limit  (Rs.15,000 to Rs.25,000 as the case may be).

In the event of dishonor of cheque against which immediate credit was provided, interest (refer Clause No.7 below) shall be recoverable from the customer for the period the bank remained out of funds, (i.e., from the date of immediate credit till day before credit afforded  to the bank) at the rate applicable for overdraft limits sanctioned for individual customers.

Bank shall levy normal collection charges and out of pocket expenses as service charges while providing immediate credit against outstation instruments tendered for collection. Exchange charges applicable for cheque purchase will not, however be charged.

2.4 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. A flat service charge of Rs.25/- per instrument shall be levied for extending immediate credit (upto a maximum amount of Rs. 15,000/Rs.25000/- as per the Policy) for local cheques received for purchase. For outstation cheques bank will be collecting the collection charges in vogue.

3.   Time Frame for Collection of Local / Outstation Cheques / Instruments :

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.
Cheques / Instruments presented in high value clearing  shall be credited on the same day (applicable only in areas covered by high value / same day clearing).

For outstation cheques / instruments sent for collection to centres within the country the following time norms shall be applied :

1. Cheques/instruments drawn on one of our branches, deposited at other centre- Same day.
2. Cheques/instruments drawn on other bank having no presence in a centre and, thus, sent for collection to –
   
   
   1. another centre where we have a branch – Max. T+6 working days
   2. centres where we do not have a branch – Max T+12 working days
      
      
3. Cheques/instruments sent in Speed Clearing will be realized on T+1 day basis.

As part of the compensation policy of the bank, the bank will pay interest to its customer on the amount of collection instruments in case there is delay in giving credit beyond the time period mentioned above. Such interest shall be paid 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 :

1. Savings Bank rate for the period of delay beyond T+6 working days/T+12 working days upto 14 days as the case may be in collection of outstation cheques.
2. Where the delay is beyond 14 days, interest will be paid at the rate applicable to for term deposit for the respective period.
3. In case of extraordinary delay, i.e. delays exceeding 45 days, interest will be paid at the rate of 2% above the corresponding Term Deposit rate.
4. In case the proceeds of cheque under collection was to be credited to an overdraft/loan account of the customer, the bank would value date the proceeds in terms of normal period required for collection.

It may be noted that interest payment as given above would be applicable only for instruments sent for collection within India and will be paid without demand by the concerned customer.

5. 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 account holder so that the account holder can inform the drawer to record stop payment and also take care that cheques, if any, issued by account holder are not dishonoured 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 cheque.

In line with the compensation policy of the bank, the bank will compensate the accountholder in respect of instruments lost in transit in the following way :

1. In case, intimation regarding loss of instrument is conveyed to the customer after the time limit stipulated for collection, (i.e., T+6/12 working days as the case may be), interest will be paid for the period exceeding the stipulated collection period at the rates specified above.
   
   
2. 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 (as the case may be) further delay in obtaining duplicate cheque/instrument and collection thereof.
   
   
3. The bank would also compensate the customer for any reasonable charges he/she incurs for recording stop order and / or 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.
   
   
4. The account holder must arrange to obtain a duplicate cheque / instrument within a maximum period of 14 days on receiving intimation from the Bank in respect of a cheque or an instrument lost in transit after it is discounted by the Bank. The amount of lost cheque, if already discounted by the bank and credited to the depositor’s account, will be reversed in case the duplicate cheque / instrument is not arranged by the customer within the stipulated period of 14 days.

6. Procedure for return / dispatch of dishonoured cheques :

Information on dishonoured cheques :

Data in respect of each dishonoured cheque for amount of Rs.1 crore and above should be made part of bank’s MIS on constituents and concerned branches shall report such data to their respective zonal office on a monthly basis and in turn zonal office will consolidate and submit the same to  Head Office, Finance Department.

Data in respect of cheques drawn in favour of stock exchanges and dishonoured should be consolidated separately by branch irrespective of the value of such cheques as a part of their MIS relating to broker entities, and be reported to their respective zonal office on a monthly basis. Zonal Office in term will consolidate and submit this information to Head Office Finance Department every month.

Dealing with incidence of frequent dishonour

1. With a view to enforce financial discipline among the customers, bank shall introduce a condition for operation of accounts with cheque facility, that in the event of dishonour of a cheque valuing Rupees one crore and above drawn on a particular account of the drawer on four occasions during the financial year for want of sufficient funds in the account, no fresh cheque book would be issued. Also, the Bank shall consider closing of the account at its discretion after giving due notice to the customer. However, in respect of advances accounts such as cash credit account, overdraft account, the need for continuance or otherwise of these credit facilities and the cheque facility relating to these accounts shall be reviewed by appropriate authority higher than the sanctioning authority.
   
   For cheques amounting to less than Rs.1 cr., bank may consider one more chance  i.e. five occasions of the incidents of dishonour of cheque in a financial year due to insufficient fund under intimation to the drawer / account holder and shall follow the same procedure thereafter as mentioned hereinabove.
   
   
2. For the purposes of introduction of the condition mentioned at (i) above in relation to operation of the existing accounts, bank may, affix a rubber stamp on the cover of the cheque book advising the constituents of the new condition at the time of issuing new cheque book.
   
   
3. If a cheque is dishonoured for a third time on a particular account of the drawer during the financial year, bank should issue a cautionary advice/letter  to the concerned constituent drawing his attention to aforesaid condition and consequential stoppage of cheque facility in the event of cheque being dishonoured on fourth occasion  for cheque of Rs. 1 crore & above and fifth occasion for cheques of less than Rs.1 crore on the same account during the financial year. Similar cautionary advice/letter may be issued if a bank intends to close the account.

General :

For the purpose of adducing evidence to prove the fact of dishonour of cheque on behalf of a complainant (i.e. payee / holder of a dishonoured cheque) in any proceeding relating to dishonoured cheque before a court, consumer forum or any other competent authority, bank should extend full cooperation, and should furnish him/her documentary proof of fact of dishonour of cheques.

7. Charging of Interest on cheques returned unpaid where Instant Credit was given :

If a cheque is sent for collection for which immediate credit was provided by the bank and it 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 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 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 was 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% p.a. 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 was returned unpaid to the extent the bank was out of funds.

8. Policy for collection of Foreign Currency Denominated Cheques/ Instruments payable in Foreign Countries.

Arrangements for collection

Bank collects cheques/ instruments only for its customers. Branches are hereby cautioned that they should collect/ purchase cheques/ instruments only in case of very reliable customers, because in USA and other countries, under the law applicable, drawee bank can claim refund of the cheque even after three years or more, if such cheque is subsequently found to have been stolen, altered, forged or counterfeit. So, in such instances, Bank should be in position to realize the amount of the cheque/ instrument sent for collection along with applicable exchange difference, interest on funds and all other applicable charges from the customer.

Our main correspondent Bank i.e Standard Chartered Bank (previously American Express Bank) for US Dollar and Euro, which are two major currencies, has centralized foreign currency cheque processing center at Chennai. Therefore in order to streamline the system and in the interest of proper customer service, Chennai Main Branch is designated as centralized collection center for foreign currency cheques/ instruments. All branches should send cheques/instruments denominated in any foreign currency payable in foreign countries only to Chennai Main Branch (centralized collection centre) for collection.

The foreign currency denominated cheques/instruments payable in foreign countries includes both cheques/instruments on collection basis by all domestic branches and cheques/instruments purchased by ‘B’ category branches.

8.1 Procedure for collection of foreign currency denominated cheque/instrument payable in foreign countries.

1. Foreign currency denominated cheque/ instrument payable in foreign countries should be accepted from Bank’s customer only. No cheques/instruments in favour of third party should be accepted, in other words the foreign currency denominated cheque/instrument should be in favour of Bank’s customer.
   
   
2. Foreign currency denominated cheque/ instrument has to be deposited in the customer account only. The payee and name of the account holder should be same.
   
   
3. Branches receiving foreign currency denominated cheques/instruments payable outside India (Originating branch) should assign their branch reference number.
   
   
4. Originating branch has to make minimum two Photostat copies of the foreign currency denominated cheque/instrument payable in foreign countries. One Photostat copy has to be sent along with the foreign currency cheque/instrument under their forwarding schedule with clear mention of their branch reference number to centralized collection centre. Another Photostat copy has to be retained at their end for records. Incase of ‘B’ category branches separate forwarding schedule has to be prepared for foreign currency denominated cheques payable in foreign countries sent on (i) collection basis and (ii) purchased.
   
   
5. Bank has permitted specified branches to hold FCNR (B) deposits and specific ‘B’ category branches to hold foreign currency accounts such as EEFC accounts, RFC accounts.  In the cases where collection of foreign currency cheques/instruments payable in foreign countries is made in foreign currency accounts, ‘B’ category branches have to clearly specify the currency to be remitted from the proceeds received by centralized collection centre in their forwarding schedule.
   
   
6. The centralized collection centre segregates currency wise cheques/ instruments sent on collection basis and purchased. Cash letters will be prepared for USD and EURO denominated cheques/instruments and deposited in to Standard Chartered Bank, our correspondent bank. For other foreign currency denominated cheques/instruments, the respective currency correspondent banks’ services have to be utilized.
   
   
7. The centralized collection centre will realize the foreign currency denominated cheques/instruments payable in foreign currency sent for collection after the normal cooling period. The details about the due date of credit, time frame for collection of cheques/instruments payable in foreign countries is specified else where in the policy.
   
   
8. On realization of the proceeds sent by centralized collection centre i.e after the normal cooling period applicable for the respective countries, the centralized collection centre will apply exchange rate for conversion in to Indian Rupees (INR) and remit the rupee equivalent to the originating branch through inter CBS parking account unless specific instruction for currency to be remitted to originating branch. The centralized collection centre has to clearly furnish the details of the exchange rate and the value date of realization to the originating branch. The applicable exchange rate is detailed elsewhere in the policy.
   
   
9. On receiving the realization proceeds from the centralized collection centre, the originating branch will credit the same in to the customer account giving effective value date after recovery of the applicable service charges.

8.2  Cheques payable in Foreign Countries

The details about the time frame for collection of cheques payable in foreign countries, Due date for credit, applicable exchange rate are furnished as follows:

Time frame for collection of cheques/instruments payable in foreign countries.

Cheques payable at foreign centres where the Bank has branch operations (or banking operations through a CORRESPONDENT etc.) will be collected through, that office. The services of correspondent banks will be utilized in country /centres where the correspondent bank has presence. Cheques drawn on foreign banks at centres where the bank or its correspondents do not have direct presence will be sent directly to the drawee bank with instructions to credit proceeds to the respective Nostro Account of the Bank maintained with one of the correspondent banks.

The Bank will endeavor to provide the credit to its customers at the earliest. The time norms for collection and return of the instrument vary from country to country and place to place within the country. Normal cooling period for cheque/ instrument payable in USA & UK will be 21 days or 15 working days whichever is higher from the date of notional credit in to Nostro credit and rest of the countries the normal cooling period will be 30 days from the notional date of notional credit in to Nostro account. Hence, Chennai Main branch will credit the proceeds to the originating branch after normal cooling period.

8.3 Purchase of Foreign currency denominated cheque/instrument payable outside India

The Bank may consider purchasing the instrument if the conduct of the account has been satisfactory in the past and incase of return of foreign currency denominated cheque/ instrument payable in foreign countries, the Bank will be in a position to realize the amount funded to the customer, recovery of exchange difference, interest on the amount funded and all other applicable charges. Accordingly all the ‘B’ category branches are authorized to purchase foreign currency denominated cheque/instrument payable outside India subject to having necessary approval from the Competent Authority. However the purchase of such cheques/instruments is restricted to major currencies such as USD, GBP, EUR, JPY, AUD and CAD.

Competent Authority for purchasing foreign currency denominated cheque/instrument payable in foreign countries is as per the delegated lending powers for purchase of cheques in domestic (i.e for Rupee equivalent).

Eligibility criteria

1. Individuals and joint account holders maintaining Savings Bank account with properly introduced and satisfactory operation for one year or more. Brach should ensure all other KYC norms are complied.


2. Personal cheques drawn in six major currencies and payable in the countries such as USA, UK, Australia and Canada.


3. The foreign currency denominated cheques/ instruments of the same person i.e drawer and the payee is same, not to be purchased.


4. Accounts where there are frequent dishonor of cheques and/or other financial obligations both inward/outward are not eligible.


5. Incase of return of foreign currency denominated cheque/ instrument payable in foreign countries unpaid, the Bank should be in a position to realize the amount funded, recovery of exchange difference, interest on the amount funded and all other applicable charges from the customer.

The 'C' category branches are not authorized to purchase foreign currency denominated cheques/instruments. However the branch may send the same for purchase to their respective nodal ‘B’ category branch under forwarding schedule allocating reference number and the details of the Competent Authority sanctioning for purchase of the cheque/instrument.

The ‘B’ category branches will apply exchange rate for purchase and conversion in to equivalent Indian Rupees (INR) of the foreign currency denominated cheque/instrument. The net purchased rupee equivalent amount after adjusting for the applicable charges and interest will be remitted to originating ‘C’ category branch through inter CBS parking account. The nodal ‘B’ category branch has to clearly furnish the detail of exchange rate to the originating branch. The applicable exchange rate is detailed elsewhere in the policy.

Cheques/instruments denominated in foreign currency and payable outside India purchased by the ‘B’ category branches have to be sent to the centralized collection centre i.e Chennai Main Branch for collection. The nodal ‘B’ category branch has to clearly mention their purchase reference number and the same has to be mentioned in all further correspondence.

The centralized collection centre segregates currency wise cheques/ instruments purchased by ‘B’ category branches. Cash letters will be prepared for USD and EURO denominated cheques/instruments and deposit in to Standard Chartered Bank, our correspondent bank. The other foreign currency denominated cheques/instruments the respective currency correspondent banks’ services have to be utilized.

On realization of the proceeds sent by centralized collection centre i.e after the normal cooling period applicable for the respective countries, the centralized collection centre will request Treasury Branch, Mumbai to remit the foreign currency to the respective ‘B’ category branch with intimation to them. The centralized collection centre has to clearly mention the respective purchase reference number assigned by ‘B’ category branch in all their correspondence.

8.4 Instant credit of foreign currency denominated cheques/instruments payable in foreign countries.

The Bank may consider providing instant credit of foreign currency denominated cheque/instrument if the conduct of the account has been satisfactory in the past and incase of return of foreign currency denominated cheque/ instrument payable in foreign countries, the Bank will be in a position to realize the amount funded to the customer, recovery of exchange difference, interest on the amount funded and all other applicable charges. The quantum for instant credit is restricted to maximum of equivalent to Rs.15, 000/- . Instant credit of such cheques/instruments is restricted to major currencies such as USD, GBP, EUR and JPY.

Eligibility criteria

1. Individuals and joint account holders maintaining Savings Bank account with properly introduced and satisfactory operation for one year or more. Branch should ensure all other KYC norms are complied.


2. Personal cheques drawn in four major currencies and payable in the countries such as USA, UK.


3. The foreign currency denominated cheques/ instruments of the same person i.e drawer and the payee is same, not to be instant credited.


4. Accounts where there are frequent dishonor of cheques and/or other financial obligations both inward/outward are not eligible.


5. Incase of return of foreign currency denominated cheque/ instrument payable in foreign countries unpaid, the Bank should be in a position to realize the amount funded, recovery of exchange difference, interest on the amount funded and all other applicable charges from the customer.


6. The unrealised instant credit amount per customer should not exceed Rs.15,000/-( inclusive of domestic instant credit) at any point of time.

The 'C' category branches are not authorized to make instant credit of foreign currency denominated cheques/instruments. However the branch may send the same for instant credit to their respective nodal ‘B’ category branch under forwarding schedule allocating reference number.

For instant credit, ‘B’ category branches will apply exchange rate for conversion in to equivalent Indian Rupees (INR) of the foreign currency denominated cheque/instrument. The rupee equivalent amount of instant credit, after adjusting for the applicable charges and interest will be remitted to originating ‘C’ category branch through inter CBS parking account. The nodal ‘B’ category branch has to clearly furnish the detail of exchange rate to the originating branch. The applicable exchange rate is detailed elsewhere in the policy.

Cheques/instruments denominated in foreign currency and payable outside India purchased by the ‘B’ category branches have to be sent to the centralized collection centre i.e Chennai Main Branch for collection. The nodal ‘B’ category branch has to clearly mention their purchase reference number and the same has to be mentioned in all further correspondence.

The centralized collection centre segregates currency wise cheques/ instruments purchased by ‘B’ category branches. Cash letters will be prepared for USD and EURO denominated cheques/instruments and deposit in to Standard Chartered Bank, our correspondent bank. The other foreign currency denominated cheques/instruments the respective currency correspondent banks’ services have to be utilized.

On realization of the proceeds sent by centralized collection centre i.e after the normal cooling period applicable for the respective countries, the centralized collection centre will request Treasury Branch, Mumbai to remit the foreign currency to the respective ‘B’ category branch with intimation to them. The centralized collection centre has to clearly mention the respective purchase reference number assigned by ‘B’ category branch in all their correspondence.

8.5 Compensation on delay in collection of Outstation Cheques/cheques payable in foreign countries

As part of the compensation policy of the Bank, interest is to be paid to a customer on the amount of collection instrument in case there is delay in giving credit beyond the date of advice issued by the centralized collection centre. Such interest shall be paid 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.

1. The due date for credit the proceeds to originating branch is one week after the applicable normal cooling period. The bank will compensate the customer if the proceeds are not credited within one week after the normal cooling period and the delay is on Bank’s part. Compensation on such will be 2% over and above Savings Bank interest for the period of delay.
   
   
2. Incase of lost of cheque/instrument denominated in foreign currency payable on foreign countries, the customer will be compensated the loss as per Bank’s compensation policy.

In the event of payment of compensation due to delay in credit of the realization proceeds and loss due to exchange rate difference has to be reported to the immediate higher Authority. The Competent Authority will look in to and fix staff accountability, if any.

8.6 Return of Foreign currency cheque/ instrument unpaid:

Incase of return of the foreign currency cheque/ instrument purchased/ instant credited/ sent on collection basis returned after the cooling period where proceeds have still not remitted by Chennai Main branch, all charges including correspondent bank charges and postages will be paid by the originating branch to Chennai Main branch on receipt of advice from Chennai Main Branch and the same will be recovered from the customer. This will also cover the out of pocket expenses such as postages, telegram, FAX etc of Chennai Main Branch.

Incase of return of the foreign currency cheques where proceeds have already been remitted by the Chennai Main Branch, the sending branch will be informed via Telex/Fax/Telegram/Telephone/E mail immediately by the Chennai Main Branch. Any exchange difference on account of such return will also be passed on to the originating branch. The rupee equivalent of the returned cheque, returning charges and out of pocket expenses etc. will be debited by Chennai Main Branch on originating branch. Chennai Main Branch has to advice the originating branch about the details of amounts debited immediately. The originating branch must immediately respond to the entry of Chennai Main Branch and recover the same from the customer with

1. Interest on funds provided to the customer for the period which the funds utilized by the customer. The applicable interest will be at par with clean overdraft rate of interest.
   
   
2. Exchange difference on account of return of Cheque/instrument.
   
   
3. Any other charges to be paid by the customer.

Special care has to be taken for the cheques of large amounts.

On return of foreign cheques sent for collection, where the amount is immediately not recovered and /or the accounts runs in to overdrawing the matter should be immediately reported by the sending branch to their respective Zonal Office and steps should be taken for recovery of the amount without delay.

8.7 Indemnity for collection of foreign currency cheques:

In USA and other countries, under the law applicable drawee bank can claim refund of the cheque even after three years or more, if such cheque is subsequently found to have been stolen, altered, forged or counterfeit.

Our customers presenting foreign cheques for collection should be informed about the above prevailing situation, and an indemnity Annex-I has to be duly executed on requisite value of non-judicial stamp paper, at the time of initial deposit of foreign currency cheque(s).

We reiterate that the branches should strictly follow “Know Your customer” guidelines of the Bank. It is also necessary that foreign cheques are accepted for collection only for the credit worthy customers, so that in case of any return of cheques after the proceeds have been paid to the depositor, it can be recovered from them.

8.8 Rate of Exchange of Foreign Currency

1. Foreign currency denominated cheque/instrument sent on collection basis.
   
   collection centre will apply the exchange rate for conversion in to equivalent Indian Rupees (INR) of foreign currency denominated cheque/ instrument sent on collection basis after applicable normal cooling period. The applicable exchange rate is as follows;The centralized
   
   
   1. If the amount of cheque/ instrument involved is up to equivalent of USD 5000/-, TT Buying card rate.
      
      
   2. If the amount of cheque/ instrument involved is above equivalent of USD 5000/-, special TT Buying rate has to be obtained from the dealing room of Treasury Branch, Mumbai.
      
      
2. Foreign currency denominated cheque/ instrument to be purchased.
   
   The 'B' category branch will apply the exchange rate for conversion in to equivalent Indian Rupees (INR) of foreign currency denominated cheque/ instrument purchased. The applicable exchange rate is as follows;
   
   
   1. If the amount of cheque/ instrument involved is up to equivalent of USD 5000/-, one month Bill Buying card rate as on date of purchase.
      
      
   2. If the amount of cheque/ instrument involved is above equivalent of USD 5000/-, special one month Bill Buying rate as on date of purchase has to be obtained from the dealing room of Treasury Branch, Mumbai.
      
      
3. Foreign currency denominated cheque/ instrument to be instant credited.
   
   The 'B' category branch will apply the exchange rate for conversion in to equivalent Indian Rupees (INR) of foreign currency denominated cheque/ instrument. The applicable exchange rate will be one month Bill Buying card rate as on the date instant credit made.

8.9 Customer Grievance Redressal:

Customer grievances on time frame of collection, compensation by additional interest on delay in collection, cheques/ instruments lost in transit, etc on collection of foreign currency denominated cheques/ instruments payable in foreign countries will be redressed as per our Bank’s policy for Grievances Redressal.

9. 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 correspondenbank(s), absence of the usual means of communication or transportation, etc. beyond the control of the bank prevents it from performing its obligations within the specified service delivery parameters.

OTHER POLICY RELATED  ISSUES  [General]

1. Policies laid down in this document shall be modified to give effect to any mandatory directives of the RBI or any policy change advised by the Government of India in this regard. The Board shall be kept apprised of such changes.
   
   
2. Any deviation / exemption from the norms mentioned in this policy shall be permitted by the competent authority only and competent authority in the context  of this policy shall be the Chairman and Managing Director  / Executive Director.
   
   
3. If any question arises regarding the application and / or interpretation of the policy / directives, a reference shall be made to the  Chairman and Managing Director  / Executive Director for clarification and the referred matter will be dealt with in accordance with his decision.
   
   
4. If any situation or problem arises which has not been covered by these policy / directives a reference shall be made to the Chairman and Managing Director / Executive Director and the situation / problem will be dealt with in accordance with his decision.
   
   
5. If the application of this policy / directives to a particular situation apparently leads to the defeat of the purpose and spirit thereof, the matter shall be referred to the Chairman and Managing Director / Executive Director and the referred matter will be dealt with in accordance with his decision.