What changed
RBI issued a circular mandating UCBs to formalize USD cheque collection policies, including transparent charges and timelines. Banks must reduce transit time by sending cheques same-day to pooling branches and correspondents. Interest must be paid from the date of nostro credit, and delay compensation must be automatic on a step-up basis.
What it means for you
UCBs must overhaul their USD cheque collection processes to cut delays and improve customer experience. This increases operational costs for courier and imaging but reduces complaint risks. Banks need to update policies, train staff, and possibly invest in Check-21 or service bureaus for faster realization.
What you must do
- Formalize a transparent USD cheque collection policy covering modes, timelines, and charges, and display it on notice boards and websites.
- Reduce transit time by sending cheques same-day from branches to centralized pooling and to correspondent banks.
- Pay interest at savings bank rate from the date of nostro credit sighting until customer credit, and compensate delays automatically on a step-up basis.
- Explore faster methods like Check-21, direct deposit with correspondents, or service bureaus for imaging and pooling.
- Set up a system for automatic delay compensation and proper complaint redressal without customer request.
Who it affects
All AD I and AD II Urban Cooperative Banks (UCBs), Customers of UCBs using USD cheque collection services, Correspondent banks and service bureaus handling USD cheques
What is the new interest payment rule for USD cheque collection?
UCBs must pay interest at the savings bank rate from the date they see credit in their nostro account until the customer's account is credited, not from an earlier date.
How should UCBs compensate for delayed USD cheque collection?
Compensation must be paid automatically (without customer request) as additional interest on a step-up basis for the delay period beyond the declared collection timeline.
What are the key steps to reduce transit time for USD cheques?
Send cheques on the same day from branches to a centralized pooling branch and then to the correspondent bank, using efficient courier services to save 2-3 days.