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 beyond 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. 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.
