What changed
Previously, banks' Cheque Collection Policies (CCPs) did not mention compensation for delays in local cheque realisation, leading to customer grievances. Now, RBI advises banks to reframe their CCPs to include compensation for local cheques as well, with a default rate of savings bank interest if no rate is specified. The existing rules for outstation cheques remain unchanged.
What it means for you
Banks must update their CCPs to explicitly state compensation for local cheque delays, ensuring customers are compensated if credit is delayed beyond the timeline. This increases operational costs for banks that delay local cheque processing, as they must pay interest at savings bank rate. It also enhances customer service and transparency, reducing complaints.
What you must do
- Revise your Cheque Collection Policy to include compensation terms for local cheque delays.
- Set a clear compensation rate; if not specified, default to savings bank interest rate for the delay period.
- Give publicity to the revised CCP through display boards in branches and on your website for better customer service and dissemination of information.
- Forward a copy of the revised CCP to RBI.
Who it affects
All Scheduled Commercial Banks including RRBs, Urban Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks
What is the default compensation rate for delayed local cheques if my bank's policy doesn't specify one?
If your bank's Cheque Collection Policy does not mention a specific rate, compensation must be paid at the savings bank interest rate for the period of delay.
Does this circular change anything for outstation cheque clearance?
No, the instructions for outstation cheques remain unchanged as per the earlier circular of November 24, 2008.
How should banks publicize the revised Cheque Collection Policy?
Banks must display the revised policy on branch notice boards and their website to ensure better customer service and information dissemination.