Cheque Collection Policy

INTRODUCTION

Qatar National Bank, (Q.P.S.C) as a part of the normal banking operations undertakes collection of cheques deposited by their Customers, some of which could be drawn on non-local bank branches. Such cheques are called outstation cheques. The Bank also undertakes to collect foreign currency cheques.

The Cheque collection policy of the bank is the reflection of bank’s efforts to provide better service to our customers and set higher standards for performance.                                

OBJECTIVE

The objective of the policy, namely “Cheque Collection Policy” (hereinafter called the ‘Policy’), is to establish a system whereby Qatar National Bank, (Q.P.S.C.) (hereinafter called the ‘Bank’) endeavors to make available the credits of cheques / instruments sent for collection locally or outstation on behalf of its customers, in the  shortest possible time. This policy is based on principles of transparency and  fairness in the treatment of customers.

SCOPE

• This policy document covers the following aspects:
• Arrangements for Collection of cheques and other instruments payable locally, at centres within India and abroad.
• Immediate Credit of Local / Outstation Cheques
• Purchase of Outstation Cheques
• Payment of Interest for Delayed Collection of Outstation Cheques
• Cheques Lost in Transit / in Clearing Process or at Paying Bank’s Branch
• Charging of Interest on Cheques Returned Unpaid where Purchase Facility was approved.

ARRANGEMENTS FOR COLLECTION OF CHEQUES AND OTHER INSTRUMENTS PAYABLE LOCALLY, AT CENTRES WITHIN INDIA AND ABROAD

QNB, Mumbai branch is a sub-member of HDFC Bank Limited and all the normal clearing and outstation cheques (including Speed Clearing) are routed through HDFC Bank Limited .

LOCAL CHEQUES :

Local Clearing is for collection of those cheques that are drawn on branches within the jurisdiction of the Mumbai Clearing House.

All cheques and other Negotiable Instruments like pay orders, drafts payable locally (in Mumbai) would be presented by the Bank to the clearing system by HDFC Bank. Cheques deposited at Bank counters and in collection boxes within the Bank premises before the specified cut-off time will be presented for clearing on the same day (Day 0). Cheques deposited at the Bank counter or in the collection boxes after the cut-off time will be presented in the next clearing cycle.

The cut-off time for accepting cheques by the Bank is as under:

Monday to Friday –   09.30 to 15.00 hours

For cheques deposited on Day 0, the same will be sent in clearing through HDFC Bank in the evening on Day 0.  Customers account will be credited on Day 1 as part of the end of day (EOD) processing.  However, cleared funds will only be available for withdrawal by the customer on the following business day (Day 2), if the cheque is cleared by the paying bank.

No charges will be levied for collection of cheques / instruments which are collected through local clearing.

SPEED CLEARING / OUTSTATION CHEQUES :

Speed clearing refers to collection of outstation cheques deposited by our customer through the local clearing system where   HDFC Bank will collect cheques drawn on designated Speed clearing participating bank branches through local clearing.

The list of speed clearing centres and details of the participating banks' branches are available at the RBI site.

Cheques payable at other centres not covered by Speed clearing are known as Outstation Cheques.

Cheques drawn on centres where HDFC Bank has a branch will be directly collected through  HDFC Bank branches at those centres. Where HDFC Bank does not have a branch of its own, the cheque would be directly sent for collection to the drawee bank or collected through a correspondent bank of HDFC Bank.

Time Frame for collection of Outstation Instruments is as below

The timeframe specified above for collection will be treated as the outer limit and credit will be afforded earlier if the process of collection gets completed earlier.

Any charges levied by the collecting banker will be recovered in full in addition to our charges as defined in the Bank’s Schedule of Charges.

CHEQUES PAYABLE IN FOREIGN CURRENCY

For cheques in foreign currencies payable in Foreign Countries, the services of our Correspondent Banks will be used, with instructions to credit the proceeds of the cheque to our  Nostro Account maintained with the Correspondent Banks.

Cheques drawn on foreign banks at centres where the bank or its correspondents do not have direct presence, will be sent direct to the drawee bank with instructions to credit proceeds to the respective Nostro Account of the bank maintained with one of the correspondent banks.

The Bank will credit the customer’s account upon citing of credit in the Bank’s Nostro account with the correspondent bank.

The Exchange Rate(Telegraphic transfer Buying Rate) prevailing as on the date of application of fund and credit to customer account will be applied.

Any charges levied by the collecting/ correspondent bank will be recovered in full in addition to our charges as defined in the Bank’s Schedule of Charges.

IMMEDIATE CREDIT OF LOCAL / OUTSTATION CHEQUES

Presently, this service is not offered by the Bank in their usual course of business, but will be considered for review on case to case basis.

PAYMENT OF INTEREST FOR DELAYED COLLECTION OF OUTSTATION CHEQUES

As part of the ‘Customer Compensation Policy’ of the Bank, the Bank will pay interest to its customer on the amount of collection instruments in case there is delay in giving credit beyond the time period mentioned. Such interest will be paid without any demand from customers in all types of accounts.

Interest for delayed collection will be paid at the following rates:

a) No interest for the period of delay within 15 days from date of deposit.

b) Where the delay is beyond 15 days interest will be paid at the rate applicable to the term deposit rate for the respective period.

The Bank will give interest for delayed collection proceeds only for instruments sent for collection within India.

The rate applicable would be the rate of interest prevailing on the date of the deposit of cheque. Delay would be calculated from the date of expiry of turnaround time indicated in the table on timeframe for collection of local/outstation instruments to the actual date of realisation of the cheque.

CHEQUES LOST IN TRANSIT / IN CLEARING PROCESS OR AT PAYING BANK’S BRANCH

As part of the Banks ‘Customer Compensation Policy’, the Bank will:

• 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 will immediately on coming to know of the loss, bring the same to the notice of the Customer so that the Customer can inform the drawer to record stop payment and also take care that cheques, if any, issued by him are not dishonoured due to the non-credit of the amount of lost cheque. The bank will provide assistance to the customer to obtain a duplicate instrument from the drawer of the cheque. The Bank would reimburse the account holder related expenses for obtaining duplicate instruments and also interest for reasonable delay occurred in obtaining the same.

This would be applicable only to instruments drawn in INR payable within India.

• If the cheque/instrument has been lost at the paying bank's branch, the collecting branch will have a right to recover the amount, including charges / interest expenses reimbursed to the customer for the loss of the cheque/instrument from the paying banker.

CHARGING OF INTEREST ON CHEQUES RETURNED UNPAID WHERE PURCHASE FACILITY WAS APPROVED

If a cheque sent for collection for which immediate credit was provided by purchasing the cheque is returned unpaid, the bank will follow as under:

• The value of the cheque will be immediately debited to the account. 
• If the proceeds of the cheques were credited to the Savings Bank account and was not withdrawn, the amount so credited will not qualify for payment of interest where the cheque is returned unpaid.
• The customer will not be charged any interest from the date immediate credit was given to the date of return of instrument unless the bank has remained out of funds on account of withdrawal of funds.
• The bank will charge interest if the customer does the withdrawal of funds of the cheque sent for collection and returned thereof.  If the proceeds are credited to overdraft / loan account, interest will be recovered at the rate of 2% above the interest rate applicable to the overdraft / loan account from the date of credit to the date of reversal of entry.

DISHONOUR OF CHEQUES

In the event of a cheque being returned unpaid, the Bank can recover interest from the customer in conformity with the applicable interest rate directives of Reserve Bank of India, for the period the bank is out of funds. Such interest would be charged for the period from the date of return of the cheque till reimbursement of the cheque amount to the bank.

Also on receipt of information regarding cheque return, the bank will provide such information to the customer. Any charges levied by the collecting/ correspondent bank will be recovered in full in addition to our charges as defined in the Bank’s Schedule of Charges and communicated to customers as indicated in the code of Banks commitment to customers adopted by the Bank.

Return/ despatch of dishonoured cheques

• The paying branch should return dishonoured Cheques presented through clearing houses strictly as per the return discipline prescribed for respective clearing house.
• Cheques dishonoured for want of funds in respect of all accounts should be returned along with the memo indicating therein the reason for dishonour as “Insufficient funds.”
• Dishonoured instruments will be returned / dispatched to the customer immediately without delay, in any case within 24 hours. Each instrument dishonoured/ returned should be accompanied by a return memo/ objection slip duly signed/ initialed.

Information on dishonoured cheques

• Each dishonoured cheque for amount of 1 crore and above will be recorded for consolidation and reporting to RBI.
• Cheques drawn in favour of stock exchanges and dishonoured will be consolidated separately irrespective of the value of such cheques for reporting to RBI.

Dealing with incidents of frequent dishonour of cheques of value INR 1 crore and above.

• No fresh cheque book would be issued in the event of dishonour of a cheque valuing INR 1 crore and above drawn on a particular account of the drawer on four occasions during the financial year for want of sufficient funds in the account.

• The bank may also consider closing current account at its discretion. However, in respect of advances accounts such as cash credit account, overdraft account, the need for continuance or otherwise of these credit facilities and the cheque facility relating to these accounts will be reviewed by appropriate authority higher than the sanctioning authority.

• If a cheque is dishonoured for a third time on a particular account of the drawer during the financial year, bank will issue a cautionary advice to the concerned constituent drawing its attention to aforesaid condition and consequential stoppage of cheque facility in the event of cheque being dishonoured on fourth occasion on the same account during the financial year.

Dealing with frequent dishonour of cheques of value of less than INR 1 crore

• Bank may decide to undertake all/selective steps for dealing with frequent dishonour of instruments less than INR 1 crore, as stated above for cheques of INR 1 crore and above.
• The dishonour of ECS mandates will also be dealt alike.

 FORCE MAJEURE

The Bank shall not be liable to compensate customers for delayed credit for unforeseen events (including but not limited to civil commotion, sabotage, accident, fires, terrorist attacks, 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 ) which is beyond the control of the bank and prevents it from performing its obligations within the specified service delivery parameters.

CUSTOMER GRIEVANCE REDRESSAL

Any customer complaint / grievance will be addressed in accordance with the Bank’s ‘Grievance Redressal Policy’.