NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
BEFORE :
HONBLE MR. JUSTICE M.B. SHAH,
PRESIDENT
MRS.
RAJYALAKSHMI RAO, MEMBER
For the Complainant : Mr.Atul Nanda, Advocate
For the Opp.
Parties : Mr.C.Mukund, Advocate with
Mr.Shashank Sharma, Ms. Neeraj,
and Mr.Aneesh Garg, Advocates for OP 1 (RBI)
Mr.S.L. Gupta,
Advocate & Mr. R.K. Dikshit Advocate for Opp. Parties
3,18,21,36,37,38,39,41,43,69
Mr.Harsh Jha and
Mr.Dhruv Mehta, Advocates for OP 4
Mr.R. Majumdar, Advocate for OPs 5, 10, 14
Ms. Praveena Gautam, Advocates for OP
6, 60
Mr.V.K. Tandon,
Advocate for OP 7
Mr.Pradeep Dewan, Mr.Anupam Dhingra, Advocates for
OP 8
Mr. Rohit Madan, Advocate for OP 9
Mr. Bishwajit Bhattacharya, Sr.Advocate
with Mr. Sudarshan Rajan, for OP 12
Mr. Rambir Singh and Mr.Kunal Tandan, Advocates for OP No.13
Mr. R.N.
Rout, Advocat and Mr. B.N. Patra
Advocate for OP 15
Mr. Saran Suri, Advocate for OP 16
Mr.H.D. Talwani,
Advocate for OP 17
Mr.Anshu Mahajan,
Advocate for OP 19
Dr.Sunil Narula,
Advocate for OP 20
Ms.Richa Choudhary,
Advocate for OP 22, 32 and 57
Mr.Ajay Monga,
Advocate for OP 23, 29
Mr.Dharam Dev, Advocate for OP 25, 55
Mr. Abhishek Kumar, Advocate for OP 26
Mr. S.S. Salooja, Advocate for OP 27
Mr.Rajender Kumar, Advocate for OP 30 and 33
Mr.P.S. Shetty,
Advocate for OP 35
Ms.Deepti and Mr.P.I. Jose, Advocates for OPs 40 and 47
Mr. D.P. Chaturvedi, Advocate for OP 44
Mr. S.K. Garg, Advocate for OP 45
Mr. Dveep Ahuja, Advocate with
Mr. V.
Ramakrishna, Manager (Legal) for OP 46
Mr.Vijay Kumar, Advocate for OP 48
Mr.Devendra Sain,
Advocate for OP 49
Mr.K.J. Naik
and Mr.Subhash Chand,
Advocates for OP 51
Mr.J.Pradhan, Advocate for OP 52
Mr. K.K. Mani, Advocate for OP 54
Mr.Manoj Arora,
Advocate for OP 56
Mr. Vijay
Kumar Gupta, Advocate for OP 63
Ms. Nirmal Mishra, Advocates for OP 76
Mr.Manish Khandelwal,
Advocate for OP 79
Ms.Surekha Raman, Advocate for OP 88 and 90
14.07.2008
Complainants have contended that there is deficiency in service by
various banks in giving credit to the payee when the cheque
is encashed and there is large float, which is
enjoyed by the Banks for their benefits.
On receipt of the Notice, RBI filed its affidavit on 9.11.2006 stating that RBI has deregulated the banking business on the aforesaid aspects by issuing circular dated 1.11.2004 and has directed the banks to lay down their own policy. The said circular is as under :
Committee
on Procedures and Performance Audit on Public Services (CPPAPS)- Formulating
policy for (i) Immediate Credit of local / outstation
cheques (ii) Time Frame for Collection of local /
outstation cheques and (iii) Interest Payment for
delayed collection
As you are
aware, Reserve Bank has been issuing instructions, from time to time, to banks
on issues relating to (i) Immediate credit of local /
outstation cheques (ii) Time frame for collection of
local / outstation cheques and (iii) Interest payment
for delayed collection. The instructions in this regard are briefly summarised below:
2.(i) Immediate Credit of local / outstation cheques: Banks were advised to afford immediate credit in
respect of outstation cheques upto
Rs.2,500/- subject to certain conditions such as bank being satisfied about the
proper conduct of the customers accounts etc., which was raised to Rs.15,000/-
vide our Circular DBOD.No.Leg.BC.21/09.07.007
dated August 23, 2002.
(ii) Time
Frame for Collection of Local / Outstation Instruments: We had vide our Circular DBOD.No.
BC.No.59/09.07.007 dated May 17, 1995 stipulated the time frame for collection
of outstation cheques in the four metropolitan
centers having MICR cheque clearing system, in
respect of State capitals and centres with more than
100 bank offices as also in case of local cheques.
(iii)
Interest payment for delayed collection: We had advised banks vide our
Circulars DBOD.No.Leg. BC.88/C.466(IV)/88
dated
3. On a
comprehensive review of the technological progress in payment and settlement
systems and the qualitative changes in operational systems and processes that
have been undertaken by a number of banks, it is observed that prescription of
a single set of rules may not be appropriate. Pertinently in most countries
banks are obliged to develop their own individual policy / procedures relating
to collection of cheques and also provide due
disclosures to the customers on the bank's obligations and the customers'
rights. Hence, efficiencies in collection of proceeds and providing funds to
customers in time is best achieved through a spirit of competition among the
banks rather than through issue of guidelines by RBI.
4. Keeping
in view the above, it has been decided to withdraw the instructions issued
regarding (i), (ii) and (iii) above, leaving it to
the individual banks to formulate policies in this regard. Banks should
consequently formulate a comprehensive and transparent policy covering all the
above three aspects, taking into account their technological capabilities,
systems and processes adopted for clearing arrangements and other internal
arrangements for collection through correspondents. Further, they may also review
their existing arrangements and capabilities and work out a scheme for
reduction in collection period. Adequate care also may be taken to ensure that
the interests of the small depositors are fully protected. The policy framed in
this regard should be integrated with the deposit policy formulated by the bank
in line with the IBA's model deposit policy. The
policy should clearly lay down the liability of the banks by way of interest
payments due to delays for non-compliance with the standards set by the banks
themselves. Compensation by way of interest payment, where necessary, should be
made without any claim from the customer.
5. The
policy may be placed before the Board of the Bank alongwith
our current instructions and the Board's specific approval should be obtained
on the reasonableness of the policy and the compliance with the spirit of our
guidelines.
6. Banks
may thereafter ensure that wide publicity is given to the policy formulated by
the them in this regard by placing it on the web-site and also displaying the
same on the notice board in their branches. The customers should be clearly
apprised of the assurances of the bank on the services on these aspects at the
time of establishment of the initial relationship be it as a depositor,
borrower or otherwise. Further, they may also take necessary steps to keep the
customers duly informed of the changes in the policy formulated by them from
time to time.
7. The
above guidelines have been issued to ensure that the obligations of the bank to
the customers and the rights of the customers stand clearly established and
observed in practice without demur. However, it may please be noted that the
Reserve Bank of India and the Banking Ombudsman would continue to exercise the
prerogative to examine any dispute which may arise between the bank and any of
its customer, vis-ΰ-vis their published policies and procedures.
8.
Please acknowledge receipt.
After hearing learned counsel for the parties on various dates, RBI has
also filed an affidavit dated 24.9.2007 wherein it has been stated as under :
Pursuant to the circulars dated 9.2.2007 and 19.7.2007, Revised Cheque Collection Policies have been received by the Respondent Bank from around 35 Banks. The policy as framed by the banks, essentially encompass the following :
a.
Policy
on collection of cheques payable locally and at
outstation centers;
b. Time frame for collection of local and outstation cheques and the time after which credit will be afforded to
customer accounts;
c.
Procedure
for compensation in case of delayed collection;
d.
Manner
of handling cases of cheques dishonoured
or lost in transit; and
e.
Facility
of immediate credit of local/outstation cheques.
A perusal of the Cheque Collection Policies,
forwarded by the Banks, reveal that while for local cheques
a time limit has been set out, for outstation cheques,
many of the public sector banks have specifically put a maximum period of 14
days for collection of cheques, even to remote
centers, while for other centers, time-schedule given by them is varying, considering
the logistic difficulties faced by them.
On the basis of the
aforesaid circular, various banks have framed their own policy with regard to
the alleged float. The policy can be
divided into two parts :
i)
Local Cheques and
ii)
Outstation Cheques
For the local cheques, after hearing all the
parties, on 21.5.2007 we passed the following order :
For the local cheques, it has been pointed out that most of the Banks who have filed affidavits and have stated that credit and debit of the cheques is being given or would be given on the same day.
However, it has been pointed out that in some cases, if the cheque is presented after cut-off time, credit may be given on the next day.
For the collection of
outstation cheques, various banks have framed their
own policies. Those policies are
tabulated and produced before this Commission along with affidavit dated
24.9.2007. In that affidavit, a
comprehensive chart is produced on record in respect of cheque
collection policies. This is on the
basis of the directions issued by this Commission and after reviewing their
respective cheque collection policies.
From the chart produced
on record, it appears that, almost all the banks take maximum period up to
7/10/14 days for collection of the outstation cheques. It has also been pointed out that if there is
delay beyond 7/10/14 days, interest at the Fixed Deposit rate or at a rate as
per the respective circulars of the banks is to be paid to the payee of the cheque.
Considering the aforesaid
affidavit filed on behalf of the RBI, it is apparent that all the banks are
required to give wide publicity to the policy formulated by them on various
subjects as directed by the RBI. It is
also required to display the same on the Notice Board in all their branches.
On the basis of the various policies framed by the Banks and the RBI directions, it is directed that:
(a). For the local cheques credit and debit shall be given on the same day or at the most on the next day.
(b). The
maximum period for collection of outstation cheques
shall be 7/10/14 days. And, if there is any delay in collection of the said chques beyond the period of 7/10/14 days, interest at the
fixed deposit rate, or at a specified rate as per the respective policy of the
banks, is to be paid to the payee of the cheques;
(c). The salient features of
the policy with regard to the collection period of outstation cheques and interest payable thereon in case of delay shall
be published on the notice board in a precise manner in bold/visible letters at
conspicuous place in every branch.
All the banks are, therefore, directed to comply with the same within a
period of two weeks, if they have not complied with the aforesaid RBI
directions uptil now.
(d). A copy of the complete
policy shall be made available by the Branch Manager, if the consumers require
the same for reading.
(e). The salient features highlighting the rights of the consumers shall also be displayed on the notice board of each branch of the Banks.
(f). Needless to say that the
RBI would monitor the directions given by it as well as this Commission.
Stand over to 28th
July 2008.
.J.
( M.B. SHAH)
PRESIDENT
(RAJYALAKSHMI RAO)
MEMBER
/sra/ 113 / Court-1