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Banks to compensate for delay in clearance of local cheques

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

August 16, 2012 1:23 IST | India Infoline News Service
The Reserve Bank of India (RBI) has asked banks to compensate their customers for delay in clearance of local cheques. Banks will have to pay the compensation at savings bank interest rate in absence of a specified rate for delayed clearance of local cheques, according to the RBI directive.

The RBI circular said, “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.”

On 13th august, RBI issued a circular in view of difficulties being faced by customers with regard to cheque clearances. The central bank has also advised banks to reframe their CCPs specifying details regarding timeline for clearance of local cheques and compensation for delay.

“Banks are advised to re-frame their CCPs to include compensation payable for the delayed period in the case of collection of local cheques,” the circular added.

“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.

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 equal to fixed deposit rate for corresponding maturity.

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