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Customer Service - Immediate Credit for Outstation and Local Cheques -
Enhancement of Ceiling
DBOD.
No. LEG. BC. 21 - 09.07.007 - dated 23rd August 2002
Please
refer to our circular DBOD No.BC.181/ 09.07.007/ 99-2000 dated May 29, 2000
advising banks to afford immediate credit upto the value of Rs.7, 500/- in
respect of outstation and local cheque tendered for collection by customers.
2.
We advise that based on the recommendation of the Indian Banks'
Association (IBA), it has been decided that the present ceiling of Rs.7, 500/-
should be enhanced to Rs.15, 000/- for immediate credit of outstation/ local
cheques subject to the extant guidelines issued by the Reserve Bank of India
from time to time.
3.
In terms of the extant instructions, banks are required to observe the
following guidelines for affording immediate credit in respect of outstation/
local cheques tendered for collection by their customers:
(i)
Normal collection charges may be recovered in case of outstation cheques
and a charge of Rs.5/-may be recovered for local cheques.
(ii)
The bank should be satisfied about the proper conduct of the account of
customer.
(iii)
The bank may extend the facility to all individual depositors without
making a distinction about their status, i.e. Savings Bank, Current or Cash
Credit Account.
(iv)
The banks should not lay any separate stipulation for minimum balance for
extending the facility.
(v)
The facility is also to be allowed to the customers at the bank's
Extension Counters subject to the usual precautions taken by banks in this
regard.
(vi)
While immediate credit of cheque will amount to grant of advance,
non-charging of interest on such cheque of the face value upto Rs.15, 000/- will
not be viewed as violation of Reserve Bank of India's directive on interest
rates on advances.
(vii)
In case where the instrument of face value exceeding Rs.15, 000/- is
received for clearing and the proceeds of the instrument are credited to the
account, in whatever manner, in advance of the date of actual realization of the
amount, interest at the stipulated rate (in addition to the usual service
charges prescribed by the bank), shall also be charged for the period for which
outlay of funds is involved.
(viii)
In the event of the cheque being returned unpaid, the bank can recover
interest in conformity with the applicable interest rate directive of Reserve
Bank of India for the period the bank is out of funds.
a.
No interest is to be charged to the customer for the period between the
date of credit of the outstation cheque lodged and its return.
b.
Banks may charge interest from the date of return of the cheque till the
reimbursement of money to the bank.
c.
Where the cheque is credited to a savings bank account, no interest will
be payable on the amount so credited if the cheque is returned unpaid.
(ix)
The banks may consider introducing different pay-in-slips superimposing a
notice to the effect that in the event of dishonour of the cheque, the customer
will have to pay interest for the period the bank is out of funds at the normal
rate.
(x)
A notice regarding the availability of facility should be prominently
displayed at each branch.
4.
You may, accordingly, issue suitable instructions to your branches for
immediate action.
5.
Please acknowledge receipt.
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