What changed
Earlier, only US dollar-denominated cheques were covered under the customer-friendly collection arrangement. Now, the same facility is extended to cheques denominated in all other foreign currencies as well.
What it means for you
UCBs must now operationalize collection of foreign currency cheques in any denomination, not just USD. This expands service scope and may require updates to internal processes, tie-ups with correspondent banks, and staff training. Improved customer service is expected, but compliance burden increases.
What you must do
- Extend the existing USD cheque collection process to all foreign currency cheques.
- Update internal circulars and customer-facing communications to reflect the multi-currency facility.
- Train staff on handling non-USD foreign currency cheques, including exchange rate and clearing procedures.
- Inform RBI Regional Office of actions taken as required by the circular.
Who it affects
All AD I and AD II urban co-operative banks (UCBs), Customers of UCBs who receive foreign currency cheques in currencies other than USD
Does this circular apply to all UCBs or only those with AD status?
It applies to all AD I and AD II category UCBs, as addressed to their Chief Executive Officers.
What currencies are now covered under this collection facility?
All foreign currencies, not just US dollars. The earlier USD-only arrangement is extended mutatis mutandis to other foreign currencies.
Do we need to report action taken to RBI?
Yes, the circular requires acknowledging receipt and keeping the respective Regional Office informed of the action initiated.