Canara Bank :: Bank Policies

CHEQUE COLLECTION POLICY AND IMMEDIATE CREDIT OF OUTSTAITON / LOCAL CHEQUES / INSTRUMENTS.

1. INTRODUCTION

The cheque collection policy of the bank is a reflection of our on-going efforts to provide better service to our Customers and set higher standards for performance. The policy is based on principles of transparency and fairness in treatment of the customers. This policy document covers the following aspects.

2. ARRANGEMENTS FOR COLLECTION

2.1 : Local Cheques:

All cheques and other negotiable instruments payable locally would be presented through the clearing system prevailing at the centre. 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. Cheques deposited after the cut-off time and in collection boxes outside the branch premises including offsite ATM (after introduction of the facility) will be presented in the next clearing cycle. As a policy, bank would give credit to the customer's 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 clearing house and wherever applicable facility of high value clearing (same day credit) will be extended to customers.
Bank branches situated at Centres where no clearing house exists, would present local cheques on drawee bank across the counter and it would be the bank's endeavour to credit the proceeds at the earliest.
[c] Our bank branches will display the cut off time up to which the cheques received will be sent for clearing on the same day including those cheques dropped in the cheque collection box provided inside the branch premises.

2.2 : Outstation cheques :
Cheques drawn on other banks and outstation centres will be normally collected through our bank's branches / offices at these centres. Where our bank does not have a branch of our own, the instruments would be preferably collected through any branch of Public Sector bank other than the drawee bank at that place. If there is no branch of Public Sector, through any scheduled bank or branch of any bank at that place. In the absence of the above, the cheque would be sent directly to the drawee bank. The bank would also use the National Clearing Service offered by the Reserve Bank of India at Centres where such collection services exists.

Cheques drawn on bank's own branches at outstation centres will be collected using the inter- branch arrangements in vogue. Branches which are connected through a central processing arrangement and are offering anywhere banking services to its customers will provide same day credit to its customers in respect of outstation instruments drawn on any of its branches in the CBS/ AWB network.

2.3 : Cheque payable in foreign countries:
Cheques payable at foreign centres where the bank has branch operations will be collected through that office. The services of correspondent bank will be utilised in Country / centres where the correspondent has presence. Cheques drawn on foreign banks at centres where the bank or its correspondents do not have direct presence will be sent directly to the drawee bank with instruction to credit proceeds to the respective Nostro account of the bank maintained with one of the correspondent banks.

2.4 : IMMEDIATE CREDIT OF LOCAL / OUTSTATION CHEQUE & PAYMENT OF INTEREST ON DELAYED COLLECTION:
The details of the facility is as under;
Eligible Persons : Individuals / joint SB / CA holders and retired employees of our Bank provided

The conduct of the account is satisfactory for at least 6 months.
The Bank has not noticed any irregular dealings in the account.
No cheques / instruments for which immediate credit was afforded returned unpaid for financial reasons.
The bank has not experienced any difficulty in recovering any amount advanced in the past including cheques returned after immediate credit.

Ineligible Persons :

Minors' account whether individually, jointly or represented by natural guardian.
Non Residents
Employees (Both Officers and Workmen) of our Bank
Self cheques, endorsed cheques and Exchange Company cheques.

Eligible Amount :

Not exceeding Rs.15000/- in respect of outstation cheques to all the eligible account holders without any specific request from the account holder .
In respect of local cheques immediate credit of Rs.15000/- will be extended only to those eligible account holder on specific request.

It will be extended in case of dividend warrants / Interest Warrants to all the eligible account holders provided they are drawn on banks and payable on demand without any pre-condition.

TERMS & CONDITIONS:

Affording immediate credit is restricted to an amount not exceeding Rs.15000/- per eligible account holder. If the eligible account holder has already been provided with the facility for an amount less than Rs.15000/- ((i.e. maximum admissible amount) branch will consider affording further credit within the overall ceiling of Rs.15000/- provided the eligible account holder tenders the cheque. At any point of time the amount of immediate credit shall not exceed Rs.15000/- per eligible account holder.
Individual cheques / Dividend warrants / Interest warrants (both Local and Outstation) for amounts exceeding Rs.15000/- are not eligible under the scheme for affording immediate Credit.
Facilities extended in all the branches excepting in certain specialised branches.

In case the cheque is returned unpaid, interest is chargeable from the date of return of such a cheque till the recovery of the amount thereof. The rate of interest shall be charged as under;

Where the party to whom such immediate credit has been given

1. Is enjoying / having other limits / liabilities	Appropriate rate of interest after determining the size of the limit duly aggregating other limits / liabilities permitted / outstanding.
2. Is not enjoying any other limit / liabilities	Rate of interest as applicable to loans / advances upto Rs.2 lacs as advised from time to time.

In such cases, extending further continuation of the facility is sole discretion of the bank.

Appropriate commission and postage shall be collected.

2.5 : Purchase of local / outstation cheques:
Bank may at its discretion, purchase local / outstation cheque tendered for collection at their specific request of the customer or as per prior arrangement. Besides satisfactory conduct of account, the standing of drawer of the cheque will also be a factor considered while purchasing the cheque.

3. Time frame for collection of local / outstation cheques / instruments:

For local cheques presented in clearing credit will be afforded as on the date of settlement of funds in clearing and the account holder will be allowed to withdraw funds as per clearing norms in vogue.
Cheques / instruments presented in high value clearing (with the minimum value of Rs. 1 lac) shall be credited on the same day (applicable only in areas covered by high value / same day clearing).
For cheques and other instruments sent for collection to centres within the country the following time norms shall be applied;
1. cheques presented at any of the four major Metro centres ( New Delhi , Mumbai, Kolkata and Chennai) and payable at any of the other three centres, maximum period of 7 days.
2. Metro Centres and State capitals (other than those of North Eastern States and Sikkim ) maximum period of 10 days.
3. In all other centres, maximum period of 14 days.
4. Cheques drawn in foreign countries :-
Such instruments are accepted for collection on the ‘best of efforts' basis. Bank may enter into specific collection arrangement with its correspondent bank for speedy collection of such instrument. Bank would give credit to the party on credit of proceeds to the bank's Nostro Account with the correspondent bank after taking into account cooling periods as applicable to the countries concerned. The above time norms are applicable irrespective of whether cheques/instruments are drawn on the bank's own branches or branches of other banks.

4. Payment of interest on delayed collection of outstation cheques:

As part of the compensation policy of the bank, the bank will pay interest to the customers on the amount of the collection instruments in case there is delay in giving credit beyond the time period mentioned above. Such interest shall be paid without any demand from customers in all types of accounts. There shall be no distinction between instruments drawn on the banks own branches or another banks for the purpose of payment of interest on delayed collection.

Interest for delayed collection shall be paid at the following rates;

Savings Bank rate for the period of delay beyond 7/10/14 days as the case may be in collection of outstation cheques.
Where the delay is beyond 14 days interest will be paid at the rate applicable to for term deposit for respective period.
In the case of extraordinary delay i.e. delays exceeding 90 days, interest will be paid at the rate of 2% above the corresponding Term deposit rate.
In the event the proceeds of cheque under collection was to be credited to an overdraft/loan amount of the customer, interest will be paid at the rate applicable to loan account. For extraordinary delays, interest will be paid at the rate of 2% above the rate applicable to the loan account.

It may be noted that interest payment as given above would be applicable only for instruments sent for collection within India .

Note: 1. Interest payment as above would be applicable only for instruments sent for collection within India

. 2. The payment of interest for the delay in collection of outstation instruments are not applicable to non-negotiable instruments viz. Prize winning lottery tickets and proceeds of matured Deposit receipts of other banks, etc.

5. Cheques / Instruments lost in transit / in clearing process or at paying banks' 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 account holder so that the account holder 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 customers 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 account holder in respect of instruments lost in transit in the following way;

In case intimation regarding loss of instruments is conveyed to the customer beyond the time limit stipulated for collection (7/10/14 days as the case may be) interest will be paid for the period exceeding the stipulated collection period at the rates specified above.
In addition, bank will pay interest on the amount of the cheque for a further period of 15 days at Savings Bank rate to provide for likely further delay in obtaining duplicate cheque / instrument and collection thereof.
The bank would also compensate the customer for any reasonable charges he / she incurs in getting duplicate cheque / instruments upon production of receipt in the event the instrument is to be obtained from a bank / institution who would charge fee for issue of duplicate instrument and also reasonable charges incurred for stopping payment of the cheque.

6. Force Majeure :

The bank shall not be liable to compensate customers for delayed credit of some unforeseen event (including but limited to civil commotion, sabotage, locklout, strike and other labour disturbances, accidents, fires, natural disasters or other "Acts of God" war, damage to the banks' facilities or of its correspondent banks) absence of the usual means of communication or all types of transportation, etc beyond the control of the bank prevents it from performing its obligation within the specified service delivery parameters.

7. Charging of Interest on cheques returned unpaid where Instant Credit was given :

If a cheque send 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. The customer will not be charged any interest from the date immediate credit was given to the date of return of the instrument unless the bank had remained out of funds on account of withdrawal of funds. Interest where applicable would be charged on the notional overdrawn balances in the account had credit not been given initially.

If the proceeds of the cheque were credited to the Savings Bank Account and was not withdrawn, the amount so credited will not qualify for payment of interest when the cheque is returned unpaid. If proceeds were credited to an overdraft/loan account, interest shall be recovered at the rate of 2% above the interest rate applicable to the overdraft/loan from the date of credit to the date of reversal of the entry if the cheque/ instrument was returned unpaid to the extent the bank was out of funds.