Model CompensaLlon ollcy

lnLroducLlon
1echnologlcal progress ln paymenL and seLLlemenL sysLems and Lhe quallLaLlve changes
ln operaLlonal sysLems and processes LhaL have been underLaken by varlous players ln
Lhe markeL have enabled markeL forces of compeLlLlon Lo come lnLo play Lo lmprove
efflclencles ln provldlng beLLer servlce Lo Lhe users of Lhe sysLem lL wlll be Lhe bank's
endeavor Lo offer servlces Lo lLs cusLomers wlLh besL posslble uLlllzaLlon of lLs
Lechnology lnfrasLrucLure WlLhdrawal of Lhe 8eserve 8ank of lndla lnsLrucLlons Lo
banks on Llme frame for collecLlon of ouLsLaLlon cheques paymenL of lnLeresL on
delayed collecLlon of ouLsLaLlon cheques/lnsLrumenLs wlLh effecL from 1
sL
november
2004 had offered bank furLher opporLunlLles Lo lncrease lLs efflclency for beLLer
performance 1hls CompensaLlon pollcy of Lhe bank ls Lherefore deslgned Lo cover
areas relaLlng Lo unauLhorlzed deblLlng of accounL paymenL of lnLeresL Lo cusLomers for
delayed collecLlon of chques/lnsLrumenLs paymenL of cheques afLer acknowledgemenL
of sLop paymenL lnsLrucLlons remlLLances wlLhln lndla forelgn exchange servlces
lendlng eLc 1he pollcy ls based on prlnclples of Lransparency and falrness ln Lhe
LreaLmenL of cusLomers
1he ob[ecLlve of Lhls pollcy ls Lo esLabllsh a sysLem whereby Lhe bank compensaLes Lhe
cusLomer for any flnanclal loss he/she mlghL lncur due Lo deflclency ln servlce on Lhe
parL of Lhe bank or any acL of omlsslon or commlsslon dlrecLly aLLrlbuLable Lo Lhe bank
8y ensurlng LhaL Lhe cusLomer ls compensaLed wlLhouL havlng Lo ask for lL Lhe bank
expecLs lnsLances when Lhe cusLomer has Lo approach 8anklng Cmbudsman or any
oLher lorum for redressal Lo come down slgnlflcanLly
lL ls relLeraLed LhaL Lhe pollcy covers only compensaLlon for flnanclal losses whlch
cusLomers mlghL lncur due Lo deflclency ln Lhe servlces offered by Lhe bank whlch can
be measured dlrecLly and as such Lhe commlLmenLs under Lhls pollcy are wlLhouL
pre[udlce Lo any rlghL Lhe bank wlll have ln defendlng lLs poslLlon before any forum
duly consLlLuLed Lo ad[udlcaLe bankercusLomer dlspuLes 2
1 unauLhorlsed / Lrroneous ueblL
lf Lhe bank has ralsed an unauLhorlzed/erroneous dlrecL deblL Lo an accounL Lhe enLry
wlll be reversed lmmedlaLely on belng lnformed of Lhe erroneous deblL afLer verlfylng
Lhe poslLlon ln Lhe evenL Lhe unauLhorlzed/erroneous deblL has resulLed ln a flnanclal
loss for Lhe cusLomer by way of reducLlon ln Lhe mlnlmum balance appllcable for
paymenL of lnLeresL on savlngs bank deposlL or paymenL of addlLlonal lnLeresL Lo Lhe
bank ln a loan accounL Lhe bank wlll compensaLe Lhe cusLomer for such loss lurLher
lf Lhe cusLomer has suffered any flnanclal loss lncldenLal Lo reLurn of a cheque or
fallure of dlrecL deblL lnsLrucLlons due Lo lnsufflclency of balance on accounL of Lhe
unauLhorlzed/erroneous deblL Lhe bank wlll compensaLe Lhe cusLomer Lo Lhe exLenL of
such flnanclal losses
ln case verlflcaLlon of Lhe enLry reporLed Lo be erroneous by Lhe cusLomer does noL
lnvolve a Lhlrd parLy Lhe bank wlll endeavor Lo compleLe Lhe process of verlflcaLlon
wlLhln a maxlmum perlod of 7 worklng days from Lhe daLe of reporLlng of erroneous
deblL ln case Lhe verlflcaLlon lnvolves a Lhlrd parLy or where verlflcaLlons are Lo be
done aL overseas cenLers Lhe bank shall compleLe Lhe verlflcaLlon process wlLhln a
maxlmum perlod of one monLh from Lhe daLe of reporLlng of erroneous LransacLlon by
Lhe cusLomer
Lrroneous LransacLlon reporLed by cusLomers ln respecL of credlL card operaLlons whlch
requlre reference Lo a merchanL esLabllshmenL wlll be handled as per rules lald down
by card assoclaLlon
2 LCS dlrecL deblLs/oLher deblLs Lo accounLs
1he bank wlll underLake Lo carry ouL dlrecL deblL/ LCS deblL lnsLrucLlons of cusLomers
ln Llme ln Lhe evenL Lhe bank falls Lo meeL such commlLmenLs cusLomer wlll be
compensaLed Lo Lhe exLenL of any flnanclal loss Lhe cusLomer would lncur on accounL
of delay ln carrylng ouL Lhe lnsLrucLlon/fallure Lo carry ouL Lhe lnsLrucLlons 3
1he bank would deblL Lhe cusLomer's accounL wlLh any appllcable servlce charge as
per Lhe schedule of charges noLlfled by Lhe bank ln Lhe evenL Lhe bank levles any
charge ln vlolaLlon of Lhe arrangemenL Lhe bank wlll reverse Lhe charges when polnLed
ouL by Lhe cusLomer sub[ecL Lo scruLlny of agreed Lerms and condlLlons Any
consequenLlal flnanclal loss Lo Lhe cusLomer wlll also be compensaLed
Where lL ls esLabllshed LhaL Lhe bank had lssued and acLlvaLed a credlL card wlLhouL
consenL of Lhe reclplenL Lhe bank would noL only reverse Lhe charges lmmedlaLely buL
also pay a penalLy wlLhouL demur Lo Lhe reclplenL amounLlng Lo Lwlce Lhe value of
charges reversed as per regulaLory guldellnes ln Lhls regard
3 aymenL of Cheques afLer SLop aymenL lnsLrucLlons
ln case a cheque has been pald afLer sLop paymenL lnsLrucLlon ls acknowledged by Lhe
bank Lhe bank shall reverse Lhe LransacLlon and glve valuedaLed credlL Lo proLecL Lhe
lnLeresL of Lhe cusLomer Any consequenLlal flnanclal loss Lo Lhe cusLomer wlll be
compensaLed as provlded under para 1 above Such deblLs wlll be reversed wlLhln 2
worklng days of Lhe cusLomer lnLlmaLlng Lhe LransacLlon Lo Lhe bank

4 lorelgn Lxchange Servlces
1he 8ank would noL compensaLe Lhe cusLomer for delays ln collecLlon of cheques
deslgnaLed ln forelgn currencles senL Lo forelgn counLrles as Lhe bank would noL be
able Lo ensure Llmely credlL from overseas banks lL ls Lhe bank's experlence LhaL Llme
for collecLlon of lnsLrumenLs drawn on banks ln forelgn counLrles dlffer from counLry
Lo counLry and even wlLhln a counLry from place Lo place 1he Llme norms for reLurn
of lnsLrumenLs cleared provlslonally also vary from counLry Lo counLry 8ank however
may conslder upfronL credlL agalnsL such lnsLrumenL by purchaslng Lhe
cheque/lnsLrumenL provlded Lhe conducL of Lhe accounL has been saLlsfacLory ln Lhe
pasL Powever Lhe bank wlll compensaLe Lhe cusLomer for undue delays ln affordlng
credlL once proceeds are credlLed Lo Lhe nosLro AccounL of Lhe bank wlLh lLs
correspondenL *Such compensaLlon wlll be glven for delays beyond one week from 4
Lhe daLe of credlL Lo nosLro AccounL/ due daLe afLer Laklng lnLo accounL normal coollng
perlod sLlpulaLed 1he compensaLlon ln such cases wlll be worked ouL as follows
a) lnLeresL for Lhe delay ln credlLlng proceeds as lndlcaLed ln Lhe collecLlon pollcy of
Lhe bank
b) CompensaLlon for any posslble loss on accounL of adverse movemenL ln forelgn
exchange raLe
3 aymenL of lnLeresL for delayed CollecLlon of CuLsLaLlon Cheques
As parL of Lhe compensaLlon pollcy of Lhe bank Lhe bank wlll pay lnLeresL Lo lLs
cusLomer on Lhe amounL of collecLlon lnsLrumenLs ln case Lhere ls delay ln glvlng credlL
beyond Lhe Llme perlod speclfled ln banks cheque collecLlon pollcy Such lnLeresL
shall be pald wlLhouL any demand from cusLomers ln all Lypes of accounLs 1here shall
be no dlsLlncLlon beLween lnsLrumenLs drawn on Lhe bank's own branches or on oLher
banks for Lhe purpose of paymenL of lnLeresL on delayed collecLlon
lnLeresL for delayed collecLlon shall be pald aL Lhe followlng raLes
a) Savlngs 8ank raLe for Lhe perlod of delay beyond 7/10/14 days as Lhe case may be
ln collecLlon of ouLsLaLlon cheques
b) Where Lhe delay ls beyond 14 days lnLeresL wlll be pald aL Lhe raLe appllcable for
Lerm deposlL for Lhe correspondlngrespecLlve perlod or Savlng 8ank raLe
whlchever ls hlgher
c) ln case of exLraordlnary delay le delays exceedlng 90 days lnLeresL wlll be pald aL
Lhe raLe of 2 above Lhe correspondlng 1erm ueposlL raLe
d) ln Lhe evenL Lhe proceeds of cheque under collecLlon was Lo be credlLed Lo an
overdrafL/loan accounL of Lhe cusLomer lnLeresL wlll be pald aL Lhe raLe appllcable
Lo Lhe loan accounL lor exLraordlnary delays lnLeresL wlll be pald aL Lhe raLe of
2 above Lhe raLe appllcable Lo Lhe loan accounL 3
6 CompensaLlon for loss of lnsLrumenL ln 1ranslL
1he bank's compensaLlon pollcy for flnanclal loss suffered by Lhe cusLomers due Lo
loss of lnsLrumenL afLer lL has been handed over Lo Lhe bank for collecLlon by Lhe
cusLomer would also be as lndlcaLed ln our collecLlon pollcy 1he same ls exLracLed
below for lnformaLlon
61 Cheques / lnsLrumenLs losL ln LranslL / ln clearlng process or aL paylng bank's
branch
ln Lhe evenL a cheque or an lnsLrumenL accepLed for collecLlon ls losL ln LranslL or ln Lhe
clearlng process or aL Lhe paylng bank's branch Lhe bank shall lmmedlaLely on comlng
Lo know of Lhe loss brlng Lhe same Lo Lhe noLlce of Lhe accounLholder so LhaL Lhe
accounLholder can lnform Lhe drawer Lo record sLop paymenL and also Lake care LhaL
cheques lf any lssued by hlm / her are noL dlshonoured due Lo noncredlL of Lhe
amounL of Lhe losL cheques / lnsLrumenLs 1he bank would provlde all asslsLance Lo Lhe
cusLomer Lo obLaln a dupllcaLe lnsLrumenL from Lhe drawer of Lhe cheque
ln llne wlLh Lhe compensaLlon pollcy of Lhe bank Lhe bank wlll compensaLe Lhe
accounLholder ln respecL of lnsLrumenLs losL ln LranslL ln Lhe followlng way
a) ln case lnLlmaLlon regardlng loss of lnsLrumenL ls conveyed Lo Lhe cusLomer beyond
Lhe Llme llmlL sLlpulaLed for collecLlon (7/10/14 days as Lhe case may be) lnLeresL
wlll be pald for Lhe perlod exceedlng Lhe sLlpulaLed collecLlon perlod aL Lhe raLes
speclfled above
b) ln addlLlon bank wlll pay lnLeresL on Lhe amounL of Lhe cheque for a furLher perlod
of 13 days aL Savlngs 8ank raLe Lo provlde for llkely furLher delay ln obLalnlng
dupllcaLe cheque/lnsLrumenL and collecLlon Lhereof
c) 1he bank would also compensaLe Lhe cusLomer for any reasonable charges he/she
lncurs ln geLLlng dupllcaLe cheque/lnsLrumenL upon producLlon of recelpL ln Lhe
evenL Lhe lnsLrumenL ls Lo be obLalned from a bank/ lnsLlLuLlon who would charge a
fee for lssue of dupllcaLe lnsLrumenL 6
7 lssue of uupllcaLe urafL and CompensaLlon for delays
uupllcaLe drafL wlll be lssued wlLhln a forLnlghL from Lhe recelpL of such requesL from
Lhe purchaser Lhereof lor delay beyond Lhe above sLlpulaLed perlod lnLeresL aL Lhe raLe
appllcable for llxed ueposlL of Correspondlng perlod wlll be pald as compensaLlon Lo
Lhe cusLomer for such delay
8 vlolaLlon of Lhe Code by banks agenL
ln Lhe evenL of recelpL of any complalnL from Lhe cusLomer LhaL Lhe bank's
represenLaLlve / courler or uSA has engaged ln any lmproper conducL or acLed ln
vlolaLlon of Lhe Code of 8ank's CommlLmenL Lo CusLomers whlch Lhe bank has
adopLed volunLarlly Lhe bank ls commlLLed Lo lnvesLlgaLe Lhe maLLer and endeavor Lo
communlcaLe Lhe flndlngs Lo Lhe cusLomer wlLhln 7 worklng days from Lhe daLe of
recelpL of complalnL and wherever [usLlfled compensaLe Lhe cusLomer for flnanclal
loss lf any as conLemplaLed under Lhls pollcy
9 1ransacLlon of aL par lnsLrumenLs" of CooperaLlve 8anks by Commerclal
8anks *
1he 88l has expressed concern over Lhe lack of Lransparency ln Lhe arrangemenL for
paymenL of aL par" lnsLrumenLs of cooperaLlve banks by commerclal banks resulLlng
ln dlshonour of such lnsLrumenLs when Lhe remlLLer has already pald for Lhe
lnsLrumenLs ln Lhls connecLlon lL ls clarlfled LhaL Lhe bank wlll noL honour cheques
drawn on currenL accounLs malnLalned by oLher banks wlLh lL unless arrangemenLs are
made for fundlng cheques lssued lssulng bank should be responslble Lo compensaLe
Lhe cheque holder for non paymenL/delayed paymenL of cheques ln Lhe absence of
adequaLe fundlng arrangemenL
* para 9 ls appllcable only for pollcy documenLs of commerclal banks
10 Lenders llablllLy CommlLmenLs Lo borrowers
1he bank has adopLed Lhe prlnclples of lenders of llablllLy ln Lerms of Lhe guldellnes
for lenders llablllLy and Lhe Code of 8ank's CommlLmenL Lo cusLomers adopLed by Lhe 7
bank Lhe bank would reLurn Lo Lhe borrowers all Lhe securlLles/documenLs/LlLle deeds Lo
morLgaged properLy wlLhln 13 days of repaymenL of all dues agreed Lo or conLracLed
1he bank wlll compensaLe Lhe borrower for monlLory loss suffered lf any due Lo delay
ln reLurn of Lhe same ln Lhe evenL of loss of LlLle deeds Lo morLgage properLy aL Lhe
hands of Lhe banks Lhe compensaLlon wlll cover ouL of pockeL expenses for obLalnlng
dupllcaLe documenLs plus a lumsum amounL as declded by Lhe bank
11 lorce Ma[eure
1he bank shall noL be llable Lo compensaLe cusLomers for delayed credlL lf some
unforeseen evenL (lncludlng buL noL llmlLed Lo clvll commoLlon saboLage lockouL
sLrlke or oLher labour dlsLurbances accldenL flres naLural dlsasLers or oLher AcLs of
Cod" war damage Lo Lhe bank's faclllLles or of lLs correspondenL bank(s) absence of
Lhe usual means of communlcaLlon or all Lypes of LransporLaLlon eLc beyond Lhe
conLrol of Lhe bank prevenLs lL from performlng lLs obllgaLlons wlLhln Lhe speclfled
servlce dellvery parameLers
12 A1M lallure
lL ls mandaLory for bank Lo relmburse Lhe cusLomer Lhe amounL wrongfully deblLed on
accounL of falled A1M wlLhln a maxlmum perlod of 12 worklng days from Lhe recelpL
of Lhe complalnL lor any fallure Lo recredlL Lhe cusLomer's accounL wlLhln 12 worklng
days from Lhe daLe of recelpL of Lhe complalnL bank shall pay compensaLlon of
8s100/ per day Lo Lhe aggrleved cusLomer 1hls compensaLlon shall be credlLed Lo Lhe
cusLomer's accounL auLomaLlcally wlLhouL any clalm from Lhe cusLomer on Lhe same
day when bank affords Lhe credlL for Lhe falled A1M LransacLlons ueLalls of charge
back ln case of A1M LransacLlon by a cusLomer of Lhe bank when he uses oLher bank
A1M may be lncluded