Cheque Collection Policies in India

Take some time off and read the RBIs policy on Cheque Collection - this is the policy of the RBI on matters pertaining to cheques that you deposit into your account.

http://rbi.org.in/scripts/FAQView.aspx?Id=78

Also note the following words in the policy

"The cheque collection policies of various banks are made available on the website of Reserve Bank of India under  the link

http://www.rbi.org.in/commonman/English/Scripts/ChequeCollectionPolicy.aspx

Banks are obliged to disclose their liability to you by way of interest payments due to delays for non-compliance with the standards set by the banks themselves. You are eligible to be compensated by way of interest payment even if no formal claim is lodged by you."

 Go ahead and access your bank's policy (if you can, I found the links to may banks go to their website and form their to navigate to find the required information is not easy)

Most banks almost use the same words -

"As a policy, bank would give credit to the customer account on the same day clearing settlement takes place. Withdrawal of amounts so credited would be permitted as per the cheque return schedule of the clearinghouse." 

Questions remain - 

1. What about delays in sending the cheque to the clearing house, caused by the bank?

2. If you read the wordings closely there are so many clauses that keep this policy from being effective - 

1. Banks will give you credit and allow you to use the funds the same day the clearing settlement takes place - Can someone please clarify when the settlement takes place...
2. Withdrawal of amounts so credited would be permitted as per the cheque return schedule of the clearinghouse. - SO, what is the cheque return schedule?

All Indian banks hide behind words, policies and the RBI while laying down policies does not ensure implementation.

Take a look at Citibank's policy

c. Clearing of Local (intra-city) Cheques

1. The branches of Citibank as of the date hereof,

are located in the cities and towns listed in

Annexure A

1. Branches of banks in each of these cities and towns participate in local clearing, viz, thecredit or debit of the proceeds of cheques where the presenting bank and the drawee bank are in thesame location. Cheques in local clearing are processed through the local clearing house which as per the clearing time-lines stipulated by the relevant clearing house, gives effect to the clearing andsettlement of cheques presented.

2. If a customer of Citibank presents a cheque on Day 0, the customer's account with the Citibank branch in that city/town would be provisionally credited in the morning on Day 1. Subsequent to receiptof information from the clearing house with regardto cheque returns for that clearing cycle, and requisiteprocessing of the same by Citibank, the customer’saccount is debited for any returns and for chequesnot returned in clearing, clear funds are availableto the customer.

Can Indian Banks demonstrate clarity? consideration for customers rather than hide behind words and policies to safeguard themselves against inbuilt (people) inefficiencies?

Who do you think suffers?
 
 
 
 
 

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