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The Committee on Procedures and Performance Audit on Public Services (CPPAPS) set up to evaluate and oversee the observance of a voluntary code of conduct by the banks has felt the need to benchmark the extant level of public service in the banking sector. Consequently RBI with the banks decided to set up, as a collaborative effort, an autonomous body, Banking Codes and Standards Board of India (BCSBI). The body envisages to provide a framework for a minimum standard of banking services, which individual customers can legitimately expect. Towards this end, BCSBI has advised member banks to place a Compensation Policy before their respective Boards and display the policy at all their branches. 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 endeavor to offer services to its customers with best possible utilization of its technology infrastructure. Withdrawal of the Reserve Bank of India instructions to banks on timeframe 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 unauthorized 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, 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 unauthorized /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
unauthorized /erroneous debit has resulted in a financial loss to
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 cheque or
failure of direct debit instructions due to insufficiency of balance
on account of the unauthorized/erroneous debit, the Bank
will compensate the
customer with an amount equivalent to interest calculated on the
unauthorized/erroneously debited amount at applicable Savings Bank
rate, minimum of Rs.50/- besides returning the cheque return charges.
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 3 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 15 days from the date of reporting of erroneous/unauthorized
transaction by the customer. In case any amount has been debited to
the account of a customer on account of fraudulent transactions the
amount will be restored to the affected customer
account without demur/delay, once the
fraud is established. 2.ECS
Direct debit/other debits to accounts The
bank will undertake to carry out direct debit/ECS debit instruction
of customers in time.
In the event of non-compliance/delayed compliance of
instructions by the Bank to meet such commitments, the customer will
be compensated equivalent to the interest calculated on the amount
to be debited, for the delayed period, at applicable SB rate,
minimum Rs.20/-, subject to maximum of Rs.1,000/- . 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 Bank levies
any charge in violation of
the arrangement or inadvertently, Bank will reverse the
charges, subject to scrutiny of agreed terms and conditions, and
compensate the customer by a sum equal to the charges reversed. 3. Issue of ATM/Debit cards Where the Bank had issued
a ATM/Debit card without written
consent of the customer, which has been disputed
by the customer without using the card, the said ATM/Debit
card will be taken back by the Bank and get
cancelled. The
Bank will reverse the charges, if levied within 2 days. 4.
Payment of Cheques after Stop Payment Instruction:
The instruction for stop payment will be
accepted at the home branch only. In case a cheque has been paid after the
stop payment instruction is acknowledged by the Bank, Bank shall
reverse the debit with value dated credit within two working days of
the customer intimating the transaction to the Bank and also
compensate the customer with Rs.100/-.
However, no compensation will be paid if cheque has been paid
prior to receipt of stop payment instruction. 5.
Foreign Exchange Services: Delay in collection of cheques payable at foreign countries
will be construed if
the customers account is not credited within 10 working days,
excluding Saturdays, from the date of clear credit to Bank’s
Nostro account i.e. after taking into account the prescribed cooling
period for that currency, with the correspondent. The compensation on account of delays in
collection of instruments in foreign currency will be as detailed
below: At 5% if the period of delay is beyond
prescribed collection period and up to 45 days where proceeds of the
instruments are to be credited to deposit accounts. In case of abnormal delay i.e delays
exceeding 45 days, interest will be paid at 1% above the specified
rate which is 5% p.a. i.e. effective rate of 6% In the event of proceeds of cheque
under collection being required to be credited to an
overdraft/loan account of the customer, interest will be paid at the
rate applicable to the loan account or State Bank Advance Rate
(SBAR) which ever is lower. For abnormal delays i.e. beyond 45 days, interest will be paid at the rate of 1% above the applicable interest rate to the loan account or SBAR, whichever is lower. Such interest shall be payable with a
minimum of Rs.20/-. 6.
Payment of Interest for delayed Collection of Outstation Cheques :
As
part of 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 in
the Bank Policy on Collection Cheques / Instruments. 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: At 5% p.a. if the period of delay is
beyond prescribed collection period and up to 45 days where proceeds
of the instruments are to be credited to the deposit accounts. In case of abnormal delay i.e delays
exceeding 45 days, interest will be paid
at 1% above the specified rate
which is 5% i.e. effective rate @ 6% In the event of proceeds of cheque under
collection being required to be credited
to an overdraft/loan account of the customer, interest will
be paid at the applicable interest rate
or SBAR whichever is lower. For abnormal delays, interest will be
paid at the rate of 1% above at the applicable interest rate or
SBAR, which ever is lower. Such interest shall be payable with a
minimum of Rs.20/-. It
may be noted that interest payment as given above would be
applicable only for instruments sent for collection within India. 7.
Cheques/Instruments lost in transit/in clearing process or at paying
bank’s branch: In
the event of 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 account holder so that the
account holder can inform the drawer to record stop payment and also
take care that cheques, if any, issued by him/her are not dishonored
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:
8. Compensation of ATM disputes: In
case of customer complaint regarding debit of accounts even though
the ATM has not disbursed cash for various reasons, the Bank shall
reimburse to the customers
the amount
wrongfully debited within a maximum period of 12 working days from
the date of receipt of
customer complaints. For
any failure to re-credit the customer’s account within 12 working
days from the date of receipt of the complaint, the bank shall pay
compensation of Rs.100/- per day from the 13th day of
receipt of the complaint to the aggrieved customer.
This compensation shall be credited to the customer’s
account automatically without any claim from the customer on the
same day when the bank affords the credit of the failed ATM
transaction. 9.
COMPENSATION FOR ADVERSE MOVEMENT IN EXCHANGE RATES: FEDAI Rule No.2.B.3 and 4.A.3 (amended
as on 27th June, 2007) provide for compensation for
delayed collection of export bills/payment of foreign inward
remittances etc., and also for adverse movement
of forex rates. Authorized Dealers shall also pay interest for delay in payment
to the exporters on export bills sent for collection and
realized. On the assumption that the customer has
complied with FEMA guidelines and Bank’s requirements, the
following compensation guidelines are presented. PAYMENT
TO EXPORTER In case of delay beyond the date when
the Forex amount is due for credit, compensation is payable for
adverse movement of exchange rate.
The compensation in exchange rate will be decided as follows:
In case the rate ruling on the date of
payment is better for the customer compared to the rate that was
ruling on the day of the amount was due for credit, no compensation
needs to be paid.
In case the rate ruling on the date of
payment is adverse for the customer compared to the rate that was
ruling on the day the amount was due for credit, compensation shall
be determined between the two rates. If the exporter has expressed his
willingness to keep part of the proceeds in EEFC A/c, no
compensation would be payable for the amount not converted. PAYMENT
OF FOREIGN INWARD REMITTANCES:
Up to USD 5000/- all foreign currency
inward remittances shall be immediately converted in to
Indian rupees. Compensation
would be applicable:
The quantum of compensation would be
determined as 50% of the difference between
the rates ruling on those dates. Amounts beyond USD 5000/- will be
converted at the option of the beneficiary and not automatically.
Hence, in normal circumstances where there has been delay on
the part of the
bank in conversion, compensation @ 50% of the difference between the
rates (on the due date of payment and the date of conversion) would
be permitted for such transactions. 10.
Violation of the Code by banks agent: In the event of a complaint from a
customer that the Bank’s representative/ courier or any other
agent has engaged in any improper conduct or acted in violation
of the agreed/accepted norms, Bank shall take appropriate
steps to investigate and redress the complaint.
Also, steps will be taken, if required as per Bank’s
decision, to prevent recurrence of similar complaints.
However, no monetary compensation will be
payable by the Bank on this account. 11.
Transaction of ‘at par instruments’ of Co-operative Banks by
Commercial Banks The
RBI has expressed concern over the lack of transparency in the
arrangement for payment of ‘ at par’ instruments of cooperative
banks by commercial banks resulting in dishonor of such instruments
when the remitter has already paid for the instruments. In this
connection it is clarified that the bank will not honor cheques
drawn on current accounts maintained by other banks with it unless
arrangements are made for funding cheques issued. Issuing bank
should be responsible to compensate the cheque holder for non
-payment/delayed payment of cheques in the absence of adequate
funding arrangement. 12. Force
Majeure The
Bank shall not be liable to compensate customers for delayed credit
if some unforeseen event (including but not limited to civil
commotion, sabotage, accident, Fires, natural 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. Notwithstanding
any thing contained here above, the Bank shall not pay any
compensation in the following cases:
13.
Amendment/modification of the policy: The
Bank reserves the right to amend/modify this policy, as and when
deemed fit and proper, at its sole discretion.
Bank shall also endeavor, to review the policy at annual
intervals. |
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