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Banks to fix charges for cheques above Rs. 1 lakh on cost-plus basis

The RBI said that banks should notify their customers about the revised service charge structure for cheque clearing

May 14, 2012 4:16 IST | India Infoline News Service

In a notification, the Reserve Bank of India (RBI) has asked banks to fix charges on a cost-plus basis for cheques valued above Rs. 1 lakh and cleared through speed and outstation cheque-clearing routes.


The RBI said that banks should notify their customers about the revised service charge structure for cheque clearing. The revised rates may also be placed on the bank’s website and a copy thereof may be submitted to RBI.


In 2011, the central bank had given banks the liberty to determine collection charges for such cheques, subject to the charges being levied in a transparent way. However, RBI came across cases of banks levying charges that were pegged at an arbitrary percentage of the cheque’s value. “Such practices are in violation of instructions issued under Section 18 of the Payment and Settlement Systems Act 2007,” the RBI said.


The central bank has also issued guidelines for clearing of cheques with no formal clearing-house to ensure faster realisation of cheques and better customer service. Banks must put in place arrangements to ensure that the instruments drawn on other banks are delivered at a mutually decided place and time each working day. While doing so, banks must ensure that the cheque’s status is known on the same day.


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