RBI tells banks to include compensation in cheque policy

http://www.thehindubusinessline.com/industry-and-economy/banking/article3764821.ece

The Reserve Bank of India has asked banks to reframe their Cheque Collection Policies (CCPs). This should include compensation payable for the delayed period in the case of collection of local cheques.

The central bank said in case, no rate is specified in the CCP for delay in realisation of local cheques, compensation at savings bank interest rate will have to be paid for the corresponding period of delay.

The RBI has come up with the abovementioned directives as it has noticed that in the CCPs and compensation policies of various banks there is no mention about the compensation in respect of the delay in realisation of local cheques.

Instances of delayed credit to customers' accounts without any compensation for the delayed period beyond the time line indicated in the CCPs, in respect of local cheques, have been brought to the RBI’s notice.

The RBI emphasised that banks are required to specify the time line for realisation of cheques, including local cheques, in their respective CCPs.

In case of local cheques, banks should permit usage of the shadow credit afforded to the customers' account immediately after closure of relative return clearing and in any case, withdrawal has to be allowed on the same day or maximum within an hour of the commencement of business on the next working day, subject to usual safeguards.

Banks have display their revised CCPs at branches and Web sites for better customer service and dissemination of information, said a RBI notification.