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 endeavour to offer services to its customers with best possible utilisation 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 unauthorised 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. Unauthorised / Erroneous Debit
If the bank has raised an unauthorised / 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 unauthorised /erroneous debit has resulted in a financial loss for the customer by way of reduction in the minimum balance applicable for payment of interest on savings bank deposit or 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 financial loss incidental to return of a cheque or failure of direct debit instructions due to insufficiency of balance on account of the
unauthorised / erroneous debit, the bank will compensate the customer to the extent of such financial losses.
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.
"Reversal of Erroneous Debits arising on Fraudulent or other transactions:-
(i) In case of any fraud, if the branch is convinced that an irregularity / fraud has been committed by its staff towards any constituent, Bank will at once acknowledge its liability and pay the just claim.
(ii) In case where the Bank is at fault,Bank will compensate the customer without demur.
(iii) In cases where neither the Bank nor the customer is at fault, but the fault lies elsewhere in the system,Bank will compensate the customers upto a limit of Rs.10000/-. "
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
acknowledged 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 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 after expiry of normal cooling period stipulated from
the date of credit to Nostro account. 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.
5. Remittances in India
The compensation on account of delays in collection of instruments
would be as indicated in the bank's collection policy, which is reproduced
below for information:
Payment of Interest for delayed Collection of
Outstation/Local Cheques:
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 upto 07/10/14 days as the case may be in collection of
outstation cheques.
b)
Where the delay is
beyond 14 days interest will be paid at the rate applicable to for
term deposit
for the respective period.
c)
In case of
extraordinary delay, i.e., delays exceeding 90 days 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 was to be credited to an
overdraft/loan
account of the customer, interest will be paid at the rate applicable to the
loan account. For extraordinary delays, interest will be paid at the
rate of 2%
above the rate applicable to the loan account.
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 same as indicated in our
collection policy. The same is extracted below for information:
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 dishonoured 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) In the event the instrument is to be obtained from a Bank/institution who would charge a fee for issue of duplicate instrument, such a reasonable charge incurred by the customer will be compensated by the Bank on production of proof of such payment.
6. Violation of the Code by bank's 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.
7. Transaction of "at par instruments" of Co-operative Banks by Commercial Banks
Once the Bank has entered into an arrangement with a Co-operative Bank to pay its instruments 'at par', the Bank will honour all such cheques payable 'at par' irrespective of the fact whether such instruments have been funded by the Co-operative Bank or not. In case prior funding is not made, the Bank will take up the issue separately with the issuing Bank. However, before entering into such an arrangement with Co-operative Bank the Bank shall make proper funding arrangement as well.
8. ATM related issues
All admitted customer claims about wrongful debit on account of failed ATM transactions will be reimbursed to the customer within a maximum period of 12 working days from the date of the receipt of the customer complaint.
For any failure to re-credit the customer's account within 12 working days from the date of receipt of the complaint, the bank will pay compensation of Rs.100/-, per day, to the aggrieved customer. This compensation will be credited to the customer's account automatically without any claim from the customer, on the same day when the bank affords the credit for the failed ATM transaction.
Banks will extend the scope of concurrent audit to cover cases of delay in reimbursing the customers for failed ATM transactions.
Bank will also place a quarterly review of ATM transactions to the Board of directors, indicating inter alia, the quantum of penalties paid,reasons thereof and the actions taken to avoid recurrence of such instances. A copy of the note along with the observations of the Board will be forwarded to the Chief General Manager, Reserve Bank of India, Department of Payment &Settlement Systems, Mumbai.
9. Force Majeure
The bank shall not be liable to compensate customers if some unforeseen event (including but not limited to civil commotion, sabotage,accident, fires, nature 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.
