1. CHEQUE CLEARING POLICY
POLICY GUIDELINES
(A) IMMEDIATE CREDIT OF OUTSTATION/LOCAL CHEQUES :
I) Outstation Cheques
Branches will afford immediate credit of outstation cheques drawn on all the centers covered
under the National Clearing scheme of RBI, All State Capitals (excluding the North Eastern
States) and on Pune, Nagpur, Kanpur, Surat, Vishakapatnam, Vadodara, Kochi, Indore,
Ludhiana, Coimbatore, Agra, Madurai and Varanasi upto and inclusive of Rs.15,000/- tendered
for collection by the customers for satisfactorily conducted accounts on the following conditions :
a) The facility will be available to individual deposit account holders without making a distinction
about their accounts i.e. Savings Bank/Current Account etc. It will be available at all
branches.
b) Normal collection and out of pocket charges are to be recovered for outstation cheques. No
“exchange” will be charged. However, considering the fact that we have no branch situated
outside Mumbai, any charges levied by the collecting banker may be recovered in full in
addition to our charges.
c) In case of outstation cheques, the facility will be restricted to one or more cheques for
aggregate amount not exceeding Rs.15,000/- at a time ensuring inter-alia that the liability on
account of outstanding of cheques purchased does not exceed Rs. 15,000/- at any time.
For the purpose of applications of the policy a satisfactorily conduced account is defined as one
that in the normal course should meet the conditions listed below :
(i) The account has been opened for a period not less than six months:
(ii) Minimum balance requirements, if any, are met
(iii) Cheques issued by the account holder have not been dishonored in past for want of
adequate balance.
(iv) Cheques deposited for collection/credit to the account have not been returned unpaid.
(v) The account is not inoperative/dormant.

2. II) Local Cheques
a) Negotiation of local cheques/instruments will not be encouraged. However, Branch
Managers may use their discretion in exceptional circumstances to permit immediate credit of
local instruments upto Rs. 15,000/- for deposit accounts on recovery of collection charges of Rs.
75/- per instrument.
b) No charges will be levied for local collection of cheques/instruments which are collected
through clearing except for item (II) (a) above.
2. If cheque/instrument for which immediate credit has been afforded is returned unpaid, Bank
shall recover interest at clean overdraft rate for the period Bank remained out of funds and
recover prescribed cheque returned charges subject to the following :
a) No interest will be charged to the customer for the period between the date of credit of the
outstation cheque lodged and its return.
b) Bank will charge interest from the date of return of the cheque till the reimbursement of money
to the bank.
c) If proceeds are credited in an overdraft/loan account, interest would be recovered at applicable
rate on the amount of returned cheque/instrument.
(B) TIME FRAME FOR COLLECTION OF LOCAL/OUTSTATION INSTRUMENTS
The delay in collection of outstation cheques for customers has always been an area of grievance
for them and it has been constant endeavour of Bank to improve upon this count and hence the
following guidelines are proposed :
I) Time frame for collection of cheques/ instruments is proposed to be as under :-
a) Collections between Metropolitan Centres/Major ‘A’ Class Cities
(Mumbai, Chennai, Kolkata, New Delhi, Ahmedabad,Bangalore
& Hyderabad) : 7 days
b) Collections between places at (a) above and State Capitals
(other than North Eastern States & Sikkim) and Area I Cities
i.e. Pune, Nagpur, Kanpur, Surat, Vishakapatnam, Vadodara,
Kochi, Indore, Ludhiana, Coimbatore, Agra, Madurai
and Varanasi : 10 days
c) Collections between all other Centres : 14 days

3. II) In no circumstances it shall be construed that Bank can take 7/10/14 days for
collection/return of outstation instruments merely because a period of 7/10/14 days
has been allowed. Once the proceeds are realised, these should be credited to the
customer's account immediately.
III) As the Bank has no foreign Branch/office, all cheques drawn on foreign Banks will be
sent direct to the drawee bank/correspondent Banks with instructions to credit the
proceeds to the respective Nostro Account of the Bank maintained with one of the
correspondent banks. There will not be any time limit for collection of
cheques/instruments payable in foreign countries as Bank will not be in a position to
ensure timely collection from overseas banks as practices for collection vary from
country to country. However, Bank will pursue for expeditious realization of
cheques/instruments sent for collection through effective follow up. The Foreign
Bank’s charges will also be recovered in addition to our charges and postage.
(D) Local Cheques :
All Cheques and other Negotiable Instruments payable locally would be presented through the
clearing system prevailing at the Centre. The area of local clearing operations would be as
decided by the respective clearing house where the Branch is located. Cheques deposited at
branch counters and in collection boxes within the branch premises before the specified cut-off
time will be presented for clearing on the same day. The cut off time for accepting the clearing
cheques for presenting on the same date will be prominently displayed at the respective
branches. Cheques deposited after the cut-off time and in collection boxes will be presented in
the next clearing cycle. As a policy, bank would give credit to the customer account on the same
day clearing settlement takes place with value dating effect from the same date. This would be
generally two working days including the day of the deposit of the cheque. Withdrawal of amounts
so credited would be permitted as per the cheque return schedule of the respective clearing
house. Wherever applicable, facility of high-value clearing (same day credit) will be extended to
customers. However, the cut off time for depositing cheques for high value clearing will also be
displayed at the respective branches.
Bank branches situated at Centres where no clearing house exists, would present local cheques
on drawee banks across the counter and it would be the Bank’s endeavour to credit the proceeds
at the earliest.

4. (E) Cheques/Instruments lost in transit/in clearing process or at
paying bank’s branch :
In the event a cheque or an instrument accepted for collection is lost in transit or in the clearing
process or at the paying bank’s branch, the Bank shall immediately on coming to know of the
loss, bring the same to the notice of the accountholder so that the accountholder can inform the
drawer to record stop payment and also take care that cheques, if any, issued by him / her are
not dishonoured due to non-credit of the amount of the lost cheques / instruments. The Bank
would provide all assistance to the customer to obtain a duplicate instrument from the drawer of
the cheque.
In line with the compensation policy of the Bank, the Bank will compensate the accountholder in
respect of instruments lost in transit in the following way:
The Bank will pay interest on the amount of the cheque for a period exceeding the normal period
accepted by the Bank for clearing of such cheques, at Savings Bank rate till the date of
realization of such cheque and credit to customers accounts to provide for likely delay in
obtaining duplicate cheque/instrument and collection thereof.
Force Majeure
The Bank shall not be liable to compensate customers for delayed credit if some unforeseen
event (including but not limited to civil commotion, sabotage, lockout, strike or other labour
disturbances, accident, fires, natural disasters or other “Acts of God”, war, damage to the Bank’s
facilities or of its correspondent bank/(s), absence of the usual means of communication or all
types of transportation, etc.) beyond the control of the Bank prevents it from performing its
obligations within the specified service delivery parameters.

5. F) Return/Bouncing of cheques where Instant Credit was given and cheques sent
for local/outstation clearing :
If a cheque sent for collection for which immediate credit was provided by the Bank is returned
unpaid, the value of the cheque will be immediately debited to the account where the credit was
given. The customers will also be advised immediately about the bouncing of cheques.
On receipt of information about the return / non-payment of cheques sent for collection, the
customers will be immediately notified about the same and the appropriate charges as per the
schedule of charges, as applicable, will be recovered from the customer’s account, under advice
to the customers.
(C) INTEREST PAYMENT FOR DELAYED COLLECTION :
It is the responsibility of Bank to collect the instruments within the time frame prescribed for the
purpose and to compensate the customers for delays due to non-adherence to time schedule.
Following guidelines are, therefore, laid down :
I) (a) Interest shall be payable without any claim from the customers, if the proceeds are
not realised/credited to the customer's accounts within the period as mentioned in paragraph (B)
above.
(b) The rate of interest payable will be equivalent to the savings bank rate, if the collection of
outstation instruments is delayed beyond the stipulated period of 7/10/14 days and upto 45 days
where the proceeds of the instruments are to be credited to the deposit accounts. Where
proceeds are to be credited to overdraft or loan accounts of the customers, the interest payable
would be at the BPLR rates.
II) A delay would be regarded as abnormal if the period of delay exceeds 45 days from the
date of deposit of the cheque/instrument from the customer for credit to his account.
III) For abnormal delays, the rate of interest payable would be 2% above the savings bank
interest rate in deposit accounts and 2% above BPLR in case of overdraft/loan accounts.
IV) Such interest shall be payable with a minimum of Rs. 5/- even if the interest calculated
works out to less than Rs. 5/-.