Banking
RBI asks banks to compensate customers for cheque clearance delay

Banks will have to pay the compensation at savings bank interest rate in absence of a specified rate, for delayed clearance of local cheques, says RBI


Mumbai: In a big relief to the bank customers, the Reserve Bank of India (RBI) has asked all banks to compensate them for delay in clearance of local cheques, reports PTI.
 
Banks, as per the RBI directive, will have to pay the compensation at savings bank interest rate in absence of a specified rate, for delayed clearance of local cheques.
 
"In case, no rate is specified in the cheque collection policies (CCP) for delay in realisation of local cheques, compensation at savings bank interest rate shall be paid for the corresponding period of delay," RBI said.
 
It also advised banks to reframe their CCPs specifying details regarding timeline for clearance of local cheques and compensation for delay and display them on their websites.
 
"...banks are advised to re-frame their CCPs to include compensation payable for the delayed period in the case of collection of local cheques as well," RBI said.
 
The central bank has issued the notification in view of difficulties being faced by customers with regard to cheque clearances.
 
"Instances of delayed credit to customers' accounts without any compensation for the delayed period beyond the timeline indicated in the CCPs, in respect of local cheques, have been brought to our notice", the RBI said.
 
Under the existing norms, the banks can provide facility of withdrawal of some amount against local cheques, subject to safeguards.
 
RBI, however, clarified there would not be any change in the guidelines regarding realisation and compensation for delay in clearance of outstation cheques.
 
Banks are required to collect outstation cheques in 14 days and in case of any delay, have to pay interest at the specified rate or equivalent to fixed deposit rate for corresponding maturity.

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COMMENTS

VijayTrimbakGokhale

4 years ago

I had taken up the matter with RBI vide my letter dated 22.11 2011 about “no compensation for delay in clearance of local cheques ” after I learnt that there were several complaints from customers about delays in local cheque clearance and without any compensation for the delayed period.
I was vigorously following up with RBI since then.

RBI has not issued this circular on it's own.

It may be noted that the banks reframed their Cheque Collection policies (CCP) after RBI in it’s Master Circular on Customer Service in banks No. RBI / 2009-10 / 57 DBOD.No.Leg. BC.9 /09.07.006/2009-10 dated July 1, 2009 advised banks to comply with the final order on 'timeframe for collection of outstation cheques' passed by the National Consumer Disputes Redressal Commission in case no. 82 of 2006. The decision came on 28th July 2008.

However till date none of the banks had provided for compensation for delay in local clearing cheques. They were denying the compensation on the spacious plea that RBI itself has not stipulated it.

RBI also did not notice it on it's own and did not do anything as mentioned above.

RBI, has since issued a circular yesterday directing banks to compensate customers for any delay in clearing local cheques. This would mean that banks will have to compensate customers monetarily if a cheque to be credited in an account on Monday, for instance, gets delayed till Wednesday.

RBI has said that in case, no rate is specified in the CCP for delay in realisation of local cheques, compensation at savings bank interest rate shall be paid for the corresponding period of delay.

I will be failing in my duty if I do not thank all the officials of RBI who handled this matter in a positive and constructive manner without any hostility and adversarial attitude and therefore I thank them profusely.

Thanks & With Warm Reagrds.

V.T.Gokhale
Parvati Nivas,
Savarkar Road,
Dombivli (East) 421 201
(M)9819287584
(R) 0251-2424845/2451288

Suzlon Energy shares hit record low on Q1 loss

Suzlon Energy plunged as much as 9% to a record low in the morning trade due to its poor first quarter results


Mumbai: Shares of wind turbine maker Suzlon Energy on Tuesday plunged as much as 9% to a record low as the company reported standalone net loss of Rs696.64 crore for the first quarter ended June 2012, reports PTI.
 
Suzlon stock opened weak and further lost 9% to touch a record low of Rs16.10 at the NSE. At the BSE, the scrip tumbled 7.62% to an all- time low of Rs16.35.
 
The company yesterday reported Q1 loss on account of lower volumes, adverse market mix, high interest burden and notional forex losses.
 
In the same quarter last fiscal, the company had reported net profit of Rs137.83 crore.
 
The company's standalone revenues also declined 59.36% to Rs596.91 crore, compared to Rs1,469.07 crore in the same quarter last year.
 
At 11.30am, Suzlon was trading 3.1% down at Rs17.15 on the BSE, while the benchmark Sensex was marginally down at 17,610.

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COMMENTS

bibhor

4 years ago

i think despite wind energy markets and other companies not doing well, Suzlon has
an amazingly strong order book of over INR 40000cr. Also as the book value of the share is around 30rs. Keeping that in mind it is a
great investment at current rates.

IRDA slaps Rs49 lakh penalty on Tata-AIG Life Insurance

IRDA has found lapses in various rules, including non-adherence to norms of referrals and preparation of financial statements, by Tata-AIG Life Insurance Company


New Delhi: The Insurance Regulatory and Development Authority (IRDA) has slapped a penalty of Rs49 lakh on Tata-AIG Life Insurance Company for violation of various regulatory norms, reports PTI.
 
The IRDA has found lapses in various rules, including non-adherence to norms of referrals and preparation of financial statements, by the life insurance company.
 
"...I hereby direct the insurer (Tata-AIG Life Insurance Company) to remit the penalty of Rs 49 lakh debiting shareholder's account within 15 days," IRDA Chairman J Hari Narayan said in his order.
 
The penalty follows an on-site inspection of Tata-AIG in August 2010, during which the regulator found violations of the provisions and guidelines of the Insurance Act.
 
The insurance company could not be contacted for comments.
 
The regulator said Tata AIG Life has made certain payments to HSBC Bank and Citibank banks in violation of IRDA's guidelines on Group Insurance policies.
 
The life insurer, IRDA said, was also been found violating the provisions of the norms while entering into referrals arrangement with non-banking entities and utilising unlicensed entities.
 
Further, the IRDA has found lapses in the business promotion expenses under the Corporate Agency guidelines.

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