INDIA POST PAYMENTS BANK (IPPB)

Cheque Collection Policy

India Post Payments Bank –Cheque Collection Policy

Contents
1. Introduction
1.1. Introduction
2. Applicability
2.1. Aspects covered
3. Arrangements for collection
3.1. CTS clearing
3.2. Local cheques
3.3. Speed clearing
3.4. Outstation cheques
3.5. Cheques payable in foreign countries
4. Time frame for collection of cheques / instruments
4.1. Time Frame
5. Payment of interest for delayed collection of outstation cheques and cheques
payable outside India
5.1. Outstation cheques and cheques payable outside India
6. Cheques / instruments lost in transit / in clearing process or at paying bank’s
branch
6.1. Lost in transit / in clearing process or at paying bank’s branch
7. Force Majeure
7.1. Exceptions to compensation
8. Charges
8.1. Service Charge
9. Dishonor of cheques
9.1. Returning dishonored cheques
9.2. Procedure for return / despatch of dishonored cheques
9.3. Information on dishonored cheques
9.4. Frequent dishonor of cheques of value of less than Rs. 1 crore
9.5. General
9.6. SMS / email alerts
10. Grievance Redressal
10.1. Redressal of grievance
11. Policy revision
Annexure I - Glossary
Annexure II – Reference
India Post Payments Bank –Cheque Collection Policy

1. Introduction
1.1. Introduction
1.1.1. This Cheque Collection Policy of India Post Payments Bank (IPPB or ‘the Bank’) is a reflection of our
on-going efforts to provide better service to our customers and set higher standards for
performance. The Cheque Collection Policy of IPPB is based on principles of transparency and
fairness in the treatment of customers. The Bank is committed to use of technology to provide
quick collection services to its customers.

2. Applicability
2.1. Aspects covered
2.1.1. This policy document covers the following aspects –
• Collection of cheques and other instruments payable locally, at centers within India and
abroad
• Our commitment regarding time norms for collection of instruments
• Policy on payment of interest in cases where the Bank fails to meet time norms for realization
of proceeds of outstation instruments
• Our policy on dealing with collection instruments lost in transit
• Our policy on dishonor of cheques

3. Arrangements for collection

3.1. CTS clearing
3.1.1. With the introduction of CTS i.e. the imaging and truncation of cheques, the physical movement of
instruments hasstopped, resulting in speeding up of the process of settlements.
3.1.2. This has helped in reducing the realization time of proceeds for a cheque presented in clearing. As a
result, the customer is able to derive the benefit of earlier credit of funds.
3.1.3. Grid clearing under CTS has ensured erasing the boundaries and eliminating the process of intercity
clearing, thus enabling the realization of cheques across cities along with the local cheques.
3.1.4. India CTS operations is handled through three grids only viz., South/West/North.
3.1.5. Payable-at-par / multi-city CTS 2010 standard cheques are issued to all customers and no charges will
be levied for clearing of payable at par cheques.

3.2. Local cheques

3.2.1. All cheques and other Negotiable Instruments payable locally would be presented through the clearing
system prevailing at the clearing center corresponding to the branch location. 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.
3.2.2. Cheques deposited after the cut-off time and in collection boxes outside the branch premises including
ATMs will be presented in the next clearing cycle. As a policy, Bank would give credit to the
customer account on the same day on which the clearing settlement takes place.
India Post Payments Bank –Cheque Collection Policy

3.2.3. Withdrawal of amounts so credited would be permitted as per the cheque return schedule of the
clearinghouse. Wherever applicable, facility of high-value clearing (same day credit) will be
extended to customers.
3.2.4. Bank branches situated at centers where no clearing house exists, would present local cheques on
drawee banks across the counterand it would be the Bank’s endeavor to credit the proceeds at the
earliest.
3.2.5. The Bank shall compensate the account holder in respect to delay in credit in accordance to Bank’s
Customer Compensation Policy.

3.3. Speed clearing

3.3.1. Outstation cheques drawn on banks participating in speed clearing at specified locations (where both
presenting and drawee banks participate in clearing) will be collected and treated at par with as
if they were local cheques. All terms and conditions applicable for local clearing instruments will
also apply to speed clearing.
3.3.2. Instruments of all transaction codes (except Government cheques) and drawn on CBS-enabled bank
branches are eligible for being presented in Speed Clearing.

3.4. Outstation cheques

3.4.1. Cheques drawn on other banks at outstation centers other than those covered under Section3.1,
3.2and3.3 above, will normally be collected through the Bank’s branches at those centers.
3.4.2. Where the Bank does not have a branch of its own, the instrument would be directly sent for collection
to the drawee bank or collected through a correspondent bank.
3.4.3. Cheques drawn on the Bank’s own branches at outstation centers will be collected using the inter-
branch arrangements in vogue.
3.4.4. Branches will provide same day credit to its customers in respect of outstation instruments drawn on
any of its branches.

3.5. Cheques payable in foreign countries

3.5.1. Bank will utilize the services of correspondent banks for collection of cheques drawn on banks in other
countries.The Bank may also have arrangement with other domestic banks in India for clearing
of such cheques.
3.5.2. Cheques drawn on foreign banks at such centers will be sent directly to the drawee bank with
instructions to credit proceeds to the Nostro Account of the Bank or itscorrespondent banks, or
sent to the domestic branch of other bank, with which the Bank may have such arrangement.

4. Time frame for collection of cheques / instruments

4.1. Time Frame
4.1.1. 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 return clearing norms
in vogue at that center.
4.1.2. For cheques and other instruments sent for collection to clearing centers within the country the
following time norms shall be applied:
India Post Payments Bank –Cheque Collection Policy

Transaction Mode
S. No. Cheque Type Time Norms Remarks

1 Local Cheque – CTS / Same day Clearing House Both the presenting
Non MICR Clearing Credit / bank as well as the
Next Day Credit drawee bank should
be Members of
(Clear funds will be
the
available for
Clearing System
withdrawal by the
customer depending
on the
clearing house
timelines for
return of cheques in
that city)

2 Outstation Cheque - Maximum of Collection basis

deposited Metro Seven working days
location and
payable at

at

Transaction Mode
S. No. Cheque Type Time Norms Remarks

another metro
location
(Mumbai,
Chennai,
Kolkata & New
Delhi)

3 Outstation Cheque - Maximum of Collection basis

payable at Ten working
IPPBbranch locations days
other than
Metro Location

4 Outstation Cheque - Maximum of Collection basis

payable at State Ten working
Capitals or Metro days
centers (other than
those of
North
Eastern States and
Sikkim)
India Post Payments Bank –Cheque Collection Policy

5 Outstation Maximum of
Cheque -payable at Fourteen working
Locations days
where IPPB does not
have a
Branch

6 Outstation cheque- Maximum of two Collection basis Cheques not payable

payable in speed working locally and Non "AT
clearing days PAR" of banks
participating in Speed
Clearing at the location
are presented in Speed
Clearing

The Banks participating

have core banking
enabled branches

Available at select MICR

centers

Transaction Mode
S. No. Cheque Type Time Norms Remarks

7 Cheques drawn on Twenty one working Best of effort basis • Bank would give credit to
foreign countries days the party on credit of
proceeds to the Bank’s
Nostro Account with
thecorrespondent bank
after taking into account
cooling periods as
applicable to the countries
concerned
• IPPB may enter into
specific
collection arrangements
with its correspondent
banks in those countries
for speedy collection of
such instrument(s)
• IPPB may also have
arrangement with other
domestic banks in India
for clearing of such
cheques

4.1.3. The above time norms are applicable irrespective of whether

cheques/instruments are drawn on the Bank’s own branches or branches of other banks.
India Post Payments Bank –Cheque Collection Policy

4.1.4. The following conditions are applicable for the time norms given above –
4.1.4.1. For customers availing Cash Management Services, collection of instrument shall be as per the terms
of the bilateral agreement between the Bank and customers.Penalties, if any, will be payable
as per the terms of the bilateral agreement.
4.1.4.2. All local cheques deposited at branch counters and in collection boxes within the branch premises
before the specified cut-off time will be processed for clearing on the same day.
4.1.4.3. Cheques deposited after the cut-off time and in collection boxes outside the branch premises including
off-site ATMs will be presented in the next clearing cycle.
4.1.4.4. The specified cut-off time at each branch is normally two hoursbefore the respective clearing house
timing and will be displayed at each of the branches.
4.1.4.5. Outstation Cheques (locations where IPPB does not have clearing facility and the drawee banks are
not a part of CTS clearing) are sent on collection basis.
4.1.4.6. Customers shall be able to utilize the proceeds, subject to adequate withdrawable balance, as soon as
clear funds have been received in line with return clearing time lines at various locations.

5. Payment of interest for delayed collection of outstation cheques and cheques

payable outside India
5.1. Outstation cheques and cheques payable outside India
5.1.1. The Bank shall compensate the account holder in respect to delay in credit in accordance to Bank’s
Customer Compensation Policy.

6. Cheques / instruments lost in transit / in clearing process or at paying bank’s

branch
6.1. Lost in transit/in clearing process or at paying bank’s branch
6.1.1. 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.
6.1.2. The Bank shall bear the stop payment charges incurred after presentment of appropriate documentary
evidence and necessary internal investigation by a competent authority.
6.1.3. The Bank would provide all assistance to the customer to obtain a duplicate instrument from the drawer
of the cheque.
6.1.4. The Bank shall compensate the account holder in respect of instruments lost in transit in accordance to
Bank’s Customer Compensation Policy.

7. Force Majeure
7.1. Exceptions to compensation
India Post Payments Bank –Cheque Collection Policy

7.1.1. The Bank shall not be liable to compensate customers for delayed credit if some unforeseen event
(including but not limited to civil commotion, sabotage, lockout, strike or other labor
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.

8. Charges
8.1. Service Charge
8.1.1. For all collection services the Bank will recover appropriate service charges as decided by the Bank
from time to time and communicated to customer as indicated in the Code of Bank’s Commitment
to Customers adopted by the Bank.

9. Dishonor of cheques
9.1. Returning dishonored cheques
9.1.1. The Bankwill return/despatchdishonored instruments to the customer promptly without delay, in any
case within 24 hours.

9.2. Procedure for return/ despatch of dishonored cheques

9.2.1. TheBank will returndishonoredcheques presentedthroughclearing
housesasperthereturndisciplineprescribedforrespectiveclearinghousein
termsofUniformRegulationsandRulesforBankers'ClearingHouses.
9.2.2. Onreceiptofsuchdishonoredchequesthe Bank willdespatchitimmediatelytothe payees / holders.
9.2.3. InrelationtochequespresenteddirectlytotheBankforsettlementof
transactionbywayoftransferbetweentwoaccountswiththeBank, the Bank willreturn such
dishonored cheques to payees/ holders immediately.
9.2.4. In case of dishonor / return of cheques, the Bank will clearly indicate the
returnreasoncodeonthereturnmemo/objectionslipwhichwillalsobearthe signature / initial of the
Bank officials as prescribed in Rule 6 of the Uniform Regulations and Rules for Bankers’
Clearing Houses (URRBCH).

9.3. Information on dishonored cheques

9.3.1. Data in respect of cheques drawn in favour of stock exchanges and dishonored will be consolidated
separately by the Bank irrespective of the value of such cheques as a part of their MIS relating to
broker entities.

9.4. Frequent dishonor of cheques of value of less than Rs. 1 crore

9.4.1. The Bank has decided to introduce a condition for operation of accounts with cheque facility that in the
event of dishonor of cheques drawn on a particular account of the drawer on four occasions
during the financial year for want of sufficient funds in the account, no fresh cheque book would
be issued. The Bank may also consider closing current account at its discretion.
India Post Payments Bank –Cheque Collection Policy

9.4.2. If a cheque is dishonored for a fourth time on a particular account of the drawer during the financial
year, the Bank will issue a cautionary advice to the concerned constituent drawing his attention
to aforesaid condition and consequential stoppage of cheque facility in the event of cheque being
dishonored on fifth occasion on the same account during the financial year. Similar cautionary
advice will be issued if the Bank intends to close the account

9.5. General
9.5.1. Forthepurposeofadducingevidencetoprovethefactofdishonorofchequeon behalf of a complainant (i.e.,
payee / holder of a dishonored cheque) in any proceeding relating to dishonored cheque before
a court, consumer forum or any other competent
authority,bankswillextendfullco-
operation,andwillfurnishhim/her documentary proof of fact of dishonor of cheques.

9.6. SMS/ email alerts

9.6.1. The Bank as a policy will enable the customer to receive SMS/email based alerts for realization or
dishonor of instruments sent through clearing/collection.

10. Grievance Redressal

10.1. Redressal of grievance
10.1.1. The Bank shall have a detailed ‘Grievance Redressal Policy’ to deal with all customer grievances /
complaints. The policy shall provide for an internal mechanism for grievance redressal in a
reasonable and just manner.
10.1.2. Complaints / grievances related to cheque collection shall also be dealt with in accordance with the
said policy.
10.1.3. Customers having any complaint/grievance with regard to services rendered by the Bank may
approach authority(ies) designated by the Bank for handling customer complaint/grievances.
10.1.4. The details of the internal set up for redressal of complaints / grievances shall be displayed in the
branch / CSP premises. The branch / CSP officials
shall provide the required information regarding procedure for lodging the complaint.
10.1.5. In case the depositor does not get response from the Bank within 30 days from the date of complaint,
or he / she is not satisfied with the response received from the Bank, he / she may approach the
Internal Ombudsman / Chief Customer Service Officer (CCSO)
10.1.6. In case the depositor does not get response from the Internal Ombudsman within 30 days from date of
complaint or he / she is not satisfied with the response received, he / she may approach the
Banking Ombudsman appointed by the RBI.

11. Policy revision

11.1.1. This policy shall come into force w.e.f. 1st January 2017.
11.1.2. The Operations department shall be responsible to own, maintain and update this policy.
India Post Payments Bank –Cheque Collection Policy

11.1.3. Any revisions to the policy may seek inputs from Sales and Marketing, and Compliance departments
of the Bank.
11.1.4. This policy shall undergo an annual review and approval process by the Board. If any change in this
policy is subsequently approved, consequent upon any change in regulatory guidelines, market
conditions, etc., such changes and approvals shall be deemed to be part of the policy until the
policy and framework are comprehensively reviewed. All such interim changes shall be approved
by the Board. The reviewed policy should be made available for information of all employees.

Annexure I - Glossary
Term Description

ATM Automated Teller Machine

CBS Core Banking System

CTS Cheque Truncation System

IPPB India Post Payments Bank

KYC Know Your Customer

MICR Magnetic Ink Character Recognition

CSP Customer Service Point

CCSO Chief Customer Service Officer

India Post Payments Bank –Cheque Collection Policy

Annexure II – Reference
Sr. No. Circular Reference Number Description
1 http://www.iba.org.in/Model%20Policy/a)%20I Model Policy on Collection of
BA%20Model%20Policy%20on%20Collection% Cheque Instruments by
20of%20Cheques_Instruments.pdf Indian Banks’ Association

Master Circular on Customer

2 DBR No.Leg.BC.21/09.07.006/2015-16
Service in Banks

Frequently Asked Questions on Speed

3 https://www.rbi.org.in/Scripts/FAQView.aspx?I d=72
Clearing

https://www.rbi.org.in/commonman/English/Sc Frequently Asked Questions on

4
ripts/FAQs.aspx?Id=273 Cheque Truncation System