What changed
Earlier, banks were free to set collection charges for cheques above ₹1 lakh under speed clearing and outstation clearing, provided they were fair and cost-plus. Now, RBI has advised banks that have fixed charges as a percentage to review and fix them on a cost-plus basis after finding violations.
What it means for you
Banks can no longer link collection fees to cheque amounts, which often inflated costs for high-value instruments. This protects customers from arbitrary charges and aligns with fair pricing norms. Lenders must rework their fee structures and update their Cheque Collection Policies accordingly.
What you must do
- If your bank currently charges a percentage of cheque value for outstation and speed clearing above ₹1 lakh, review and fix charges on a cost-plus basis.
- Ensure speed clearing charges are lower than outstation charges.
- Update your Cheque Collection Policy (CCP) with the revised service charge structure.
- Notify customers about the updated charges and display them on your bank's website.
- Submit a copy of the revised charges to RBI and confirm compliance.
Who it affects
All Scheduled Commercial Banks including RRBs, Urban Co-operative Banks (UCBs), State Co-operative Banks, District Central Co-operative Banks, Local Area Banks
What is the key change in this circular?
RBI has advised banks that currently charge collection fees as a percentage of the cheque value for outstation and speed clearing of instruments above ₹1 lakh to review and fix charges on a cost-plus basis.
Why did RBI issue this directive?
Instances of banks levying arbitrary percentage-based charges, violating earlier instructions, were reported. Such practices contravene instructions issued under Section 18 of the Payment and Settlement Systems Act, 2007.
What should banks do to comply?
Banks that charge percentage-based fees must review their fee structure, fix charges on a cost-plus basis, ensure speed clearing charges are lower than outstation charges, update their Cheque Collection Policy, notify customers, and submit the revised structure to RBI.