|
Introduction
Technological progress in payment and settlement
systems and the qualitative changes in operational systems and
processes that have been undertaken by various players in the market
have enabled market forces of competition to come into play to
improve efficiencies in providing better service to the users of the
system. It will be the bank's endeavor to offer services to its
customers with best possible utilization of its technology
infrastructure. Withdrawal of the Reserve Bank of India instructions
to banks on time frame for collection of outstation cheques, payment
of interest on delayed collection of outstation cheques/instruments,
with effect from 1st November 2004, had offered bank further
opportunities to increase its efficiency for better performance.
This compensation policy of the bank is therefore, designed to cover
areas relating to unauthorized debiting of account, payment of
interest to customers for delayed collection of cheques/instruments,
payment of cheques after acknowledgement of stop payment
instructions, remittances within India, foreign exchange services,
lending, etc. The policy is based on principles of transparency and
fairness in the treatment of customers.
The objective of this policy is to establish a
system whereby the bank compensates the customer for any financial
loss he/she might incur due to deficiency in service on the part of
the bank or any act of omission or commission directly attributable
to the bank. By ensuring that the customer is compensated without
having to ask for it, the bank expects instances when the customer
has to approach Banking Ombudsman or any other Forum for redressal
to come down significantly.
It is reiterated that the policy covers only
compensation for financial losses which customers might incur due to
deficiency in the services offered by the bank which can be measured
directly and as such the commitments under this policy are without
prejudice to any right the bank will have in defending its position
before any forum duly constituted to adjudicate banker-customer
disputes.
1. Unauthorized/Erroneous Debit
If the bank has raised an unauthorized/erroneous
direct debit to an account, the entry will be reversed immediately
on being informed of the erroneous debit, after verifying the
position. In the event the unauthorized/erroneous debit has resulted
in a direct financial loss for the customer by way of (i) reduction
in the minimum balance applicable for payment of interest on savings
bank deposit or (ii) payment of additional interest to the bank in a
loan account, the bank will compensate the customer for such loss.
Further, if the customer has suffered any direct financial loss
incidental to return of a cheque or failure of direct debit
instructions due to insufficiency of balance on account of the
unauthorized/erroneous debit, the bank will compensate the customer
to the extent of such direct financial losses. However, financial
loss mentioned hereinabove will not cover any loss incurred by the
customer due to loss of reputation or loss of profit.
In case verification of the entry reported to be
erroneous by the customer does not involve a third party, the bank
shall arrange to complete the process of verification within a
maximum period of 7 working days from the date of reporting of
erroneous debit. In case, the verification involves a third party,
the bank shall complete the verification process within a maximum
period of one month from the date of reporting of erroneous
transaction by the customer.
The RBI guidelines for reversal of erroneous
debits arising on fraudulent or other transactions are as under :-
i) "In case where bank s are at fault, the banks
should compensate their customers without demur and"
ii) "In case neither the banks are at fault nor
the customers are at fault but the fault lies elsewhere in the
system then also the banks should compensate the customers ( up to a
limit, as specified below ) as a part of the Board approved customer
relation policy ".
As regards clause no. (ii) above we shall
compensate depending upon the facts of the case and on case to case
basis upto 25% of the loss suffered by the customer subject to a
maximum of Rs.1 lac (one lac) only.
Accordingly we have got our policy approved by
the Board of Directors during its meeting held on 28.11.2002. In
terms of the Policy the delegation of powers to the
Executives/Officers as approved by our Board of Directors for
compensating customers where -
a) Bank is at fault ;
b) Neither bank nor customer is at fault but the
fault lies elsewhere in the system are as under:-
| CMD |
ED |
GM |
Regional Head |
| 2,00,000/- |
1,00,000/- |
50,000/- |
25,000/- |
As a part of our exercise of reviewing of policies,
the discretionary powers of the various levels of executives are
being suggested as below for necessary approval of the Board of
Directors :-
| CMD |
ED |
GM/ Regional Head (GM ) |
Regional Head ( DGM/AGM ) |
| 10,00,000/- |
5,00,000/- |
200,000/- |
50,000/- |
At present our bank is not having Credit Card
Service so the erroneous transaction reported by customers in
respect of credit card operations which require reference to a
merchant establishment will not applicable at this stage but as and
when our bank will start the Credit Card Operation suitable
amendments will be carried out as per rules laid down by card
association.
2. ECS direct debits/other debits to accounts
The bank will undertake to carry out direct
debit/ECS debit instructions of customers in time. In the event the
bank fails to meet such commitments customer will be compensated to
the extent of any financial loss the customer would incur on account
of delay in carrying out the instruction/failure to carry out the
instructions.
The bank would debit the customer's account with
any applicable service charge as per the schedule of charges
notified by the bank. In the event the bank levies any charge in
violation of the arrangement, the bank will reverse the charges when
pointed out by the customer subject to scrutiny of agreed terms and
conditions. Any consequential financial loss to the customer will
also be compensated.
3. Payment of Cheques after Stop Payment
Instructions
In case a cheque has been paid after stop payment
instruction is acknowledge by the bank, the bank shall reverse the
transaction and give value-dated credit to protect the interest of
the customer. Any consequential financial loss to the customer will
be compensated as provided under para 1 above. Such debits will be
reversed within 2 working days of the customer intimating the
transaction to the bank.
4. Foreign Exchange Services
The Bank would not compensate the customer for
delays in collection of cheques designated in foreign currencies
sent to foreign countries as the bank would not be able to ensure
timely credit from overseas banks. It is the bank's experience that
time for collection of instruments drawn on banks in foreign
countries differ from country to country and even within a country,
from place to place. The time norms for return of instruments
cleared provisionally also vary from country to country. Bank
however, would consider upfront credit against such instrument by
purchasing the cheque/instrument, provided the conduct of the
account has been satisfactory in the past. However, the bank will
compensate the customer for undue delays in affording credit once
proceeds are credited to the Nostro Account of the bank with its
correspondent. Such compensation will be given for delays beyond one
week from the date of credit to Nostro Account/due date after taking
into account normal cooling period stipulated. The compensation in
such cases will be worked out as follows :
a) Interest for the delay in crediting proceeds
as indicated in the collection policy of the bank.
b) Compensation for any possible loss on account
of adverse movement in foreign exchange rate.
c) As per FEDAI Rule 4.A.3(II) compensation @ 2%
above the saving account rate , for amount up to Rs. 10,00,000/- for
delay beyond 10days from the date of receipt of remittance advice,
in case of amount exceeding Rs.10,00,000/- for delay beyond 3 days(
including Saturdays ) from the date of receipt of credit advice in
sending remittance advice to the beneficiary.
5. Remittances in India
If a customer want to remit money within India,
bank will disclose the details of all charges including commission
that a customer has to pay for the services as per the Tariff
Schedule as amended from time to time.
6. Payment of Interest for delayed Collection
of Outstation Cheques
The compensation on account of delays in
collection of instruments would be as indicated in the bank's
collection policy:
a) The bank will inform the customers about the
clearing cycle for local instruments and the outstation instruments
including details such as when the customer can withdraw money after
lodging collection instruments and when the customer will be
entitled to earn delayed interest as per our Cheque Collection
Policy.
b) Provide details, if bank offer immediate
credit for outstation cheques, including the applicable terms and
conditions, such as the limits up to which the instruments tendered
by the customers can be credited, operating accounts satisfactorily,
etc.
c) Proceed as per our cheque collection policy
and provide all assistance to obtain a duplicate cheque/ instrument
in case the tendered instruments lost in transit.
d) The above information will be given at the
time of opening of the account and whenever ask for. If any change
in the policy, the revised policy will be displayed on our website
and will be available at all our branches.
e) If a customer want to remit money within India
bank will disclose the details of all charges including commission
that a customer have to pay for the services as per the Tariff
Schedule as amended from time to time.
Time frame for collection of local/ outstation
instruments
Local Cheques/Instruments :
1 to 3 days
Outstation Cheques/Instruments : 7 days for National Clearing
centers
10 days in case of State Capitals
other than North Eastern States &
Sikkim
14 days for rest of the country
As part of the 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 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 bank's own
branches or on other banks for the purpose of payment of interest on
delayed collection.
Interest for delayed collection shall be paid
at the following rates :
a) Savings Bank rate for the period of delay
beyond 07 days for National Clearing Centres / 10 days in case of
State Capitals (other than North Eastern States & Sikkim) / 14 days
for rest of the country as the case may being collection of
outstation cheques.
b) Where the delay is beyond 14 days after the
time frame for collection of outstation instruments (07/10/14 days
as indicated in "a" above) interest will be paid at the rate
applicable for term deposit for the respective period.
c) In case of extraordinary delay, i.e. delays
exceeding 90 days after the time frame (07/10/14 days as indicated
in "a" above) for collection of outstation instruments interest will
be paid at the rate of 2% above the corresponding Term Deposit rate.
d) In the event the proceeds of cheque under
collection is to be credited to an overdraft/loan account of the
customer, the bank would consider value-dating the proceeds keeping
normal period required for collection in mind.
It may be noted that interest payment as given
above would be applicable only for instruments sent for collection
"within India".
The bank's compensation policy for financial loss
suffered by the customers due to loss of instrument after it has
been handed over to the bank for collection by the customer would
also be as indicated in our Bank's Cheque Collection Policy (clause
no.5 of the said policy).
7. 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 dishonored 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 :
a) In case intimation regarding loss of
instrument is conveyed to the customer beyond the time limit
stipulated for collection (07/10/14 days as the case may be)
interest will be paid for the period exceeding the stipulated
collection period at the rates specified above.
b) 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.
c) The bank would also compensate the customer
for any reasonable charges he/she incurs in getting duplicate cheque/instrument
upon production of receipt, in the event the instrument is to be
obtained from a bank/institution who would charge a fee for issue of
duplicate instrument.
8. Violation of the Code by Banks Agent
In the event of receipt of any complaint from the
customer that the bank's representative/courier or DSA has engaged
in any improper conduct or acted in violation of the Code of Bank's
Commitment to Customers which the bank has adopted voluntarily, bank
shall take appropriate steps to investigate and to handle the
complaint and to compensate the customer for financial losses, if
any.
9. Transaction of "at par instruments" of
Co-operative Banks by Commercial Banks
The RBI has expressed concern over the lack of
transparency in the arrangement for payment of "at par" instruments
of co-operative banks by commercial banks resulting in dishonor of
such instruments when the remitter has already paid for the
instruments. In this connection it is clarified that the bank will
not honour cheques drawn on current accounts maintained by other
banks with it unless arrangements are made for funding cheques
issued. Issuing bank should be responsible to compensate the cheque
holder for non payment/delayed payment of cheques in the absence of
adequate funding arrangement.
Therefore, once arrangement made is in public
domain (Bank's website) the paying bank should honour the cheque and
settle the matter separately with the issuing bank
10. Force Majeure
The bank shall not be liable to compensate
customers for delayed credit if some unforeseen even (including but
not limited to civil commotion, sabotage 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. |