RBI asks banks to compensate customers for cheque clearance delay
MDT/PTI 14 August 2012

Banks will have to pay the compensation at savings bank interest rate in absence of a specified rate, for delayed clearance of local cheques, says RBI


Mumbai: In a big relief to the bank customers, the Reserve Bank of India (RBI) has asked all banks to compensate them for delay in clearance of local cheques, reports PTI.
 
Banks, as per the RBI directive, will have to pay the compensation at savings bank interest rate in absence of a specified rate, for delayed clearance of local cheques.
 
"In case, no rate is specified in the cheque collection policies (CCP) for delay in realisation of local cheques, compensation at savings bank interest rate shall be paid for the corresponding period of delay," RBI said.
 
It also advised banks to reframe their CCPs specifying details regarding timeline for clearance of local cheques and compensation for delay and display them on their websites.
 
"...banks are advised to re-frame their CCPs to include compensation payable for the delayed period in the case of collection of local cheques as well," RBI said.
 
The central bank has issued the notification in view of difficulties being faced by customers with regard to cheque clearances.
 
"Instances of delayed credit to customers' accounts without any compensation for the delayed period beyond the timeline indicated in the CCPs, in respect of local cheques, have been brought to our notice", the RBI said.
 
Under the existing norms, the banks can provide facility of withdrawal of some amount against local cheques, subject to safeguards.
 
RBI, however, clarified there would not be any change in the guidelines regarding realisation and compensation for delay in clearance of outstation cheques.
 
Banks are required to collect outstation cheques in 14 days and in case of any delay, have to pay interest at the specified rate or equivalent to fixed deposit rate for corresponding maturity.
Comments
VijayTrimbakGokhale
1 decade ago
I had taken up the matter with RBI vide my letter dated 22.11 2011 about “no compensation for delay in clearance of local cheques ” after I learnt that there were several complaints from customers about delays in local cheque clearance and without any compensation for the delayed period.
I was vigorously following up with RBI since then.

RBI has not issued this circular on it's own.

It may be noted that the banks reframed their Cheque Collection policies (CCP) after RBI in it’s Master Circular on Customer Service in banks No. RBI / 2009-10 / 57 DBOD.No.Leg. BC.9 /09.07.006/2009-10 dated July 1, 2009 advised banks to comply with the final order on 'timeframe for collection of outstation cheques' passed by the National Consumer Disputes Redressal Commission in case no. 82 of 2006. The decision came on 28th July 2008.

However till date none of the banks had provided for compensation for delay in local clearing cheques. They were denying the compensation on the spacious plea that RBI itself has not stipulated it.

RBI also did not notice it on it's own and did not do anything as mentioned above.

RBI, has since issued a circular yesterday directing banks to compensate customers for any delay in clearing local cheques. This would mean that banks will have to compensate customers monetarily if a cheque to be credited in an account on Monday, for instance, gets delayed till Wednesday.

RBI has said that in case, no rate is specified in the CCP for delay in realisation of local cheques, compensation at savings bank interest rate shall be paid for the corresponding period of delay.

I will be failing in my duty if I do not thank all the officials of RBI who handled this matter in a positive and constructive manner without any hostility and adversarial attitude and therefore I thank them profusely.

Thanks & With Warm Reagrds.

V.T.Gokhale
Parvati Nivas,
Savarkar Road,
Dombivli (East) 421 201
(M)9819287584
(R) 0251-2424845/2451288
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