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Thursday, January 20, 2011

Review of Service Charges for Cheque Collection – Local, Outstation and Speed Clearing


Review of Service Charges for Cheque Collection – Local, Outstation and Speed Clearing

Reserve Bank of India, DPSS has issued a Notification today, with wide reaching implications for the Cheque Collection Operations of Banks.
The Notification will be effective from 01/04/2011.

The Notification No is RBI/2010-11/377 DPSS.CO.CHD.No. 1671 / 03.06.01 / 2010-11 dt.January 19, 2011
 The complete Notification can be accessed @ http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=6228&Mode=0
The highlights of the Notification are: -
01)                       There are advantages of using electronic payments, especially for large value transactions.

02)                       RBI will continue to protect the interest of Saving Bank account holders by mandating charges for smaller value transactions relating to saving bank accounts.

03)                       Freedom is specified to Banks, to determine charges for larger value transactions i.e. collection of instruments for credit to other types of accounts.

04)                       The charges so levied, should be fair and transparent.

05)                       Board of Directors has to approve the Service Charge Structure.

06)                       The services charges should specify the maximum charges that they would have to pay, including charges if any, payable to other banks.

07)                       Freeing of Service charges will hasten the movement from paper mode to electronic mode.

The Charges Table – Reproduced from Reserve Bank of India website.

(a)  Service (Processing) Charges for Local Clearing (by Clearing Houses from Member Banks) –


System
Existing (Rs.)
Revised (Rs.)
Presenting
Bank
Drawee
Bank
Presenting
Bank
Drawee
Bank
Clearing at MICR-CPCs
1.00
1.00
1.00
1.50
Cheque Truncation
0.50
0.50
0.50
1.00



(b) Service Charges for Outstation Cheque Collection –

Existing (Rs.)
Revised (Rs.)



Service
charge
from all customers

Service
Charge from Savings
a/c customers

Up to and including
10,000


50

Up to and including 5,000

25^
Above 5,000 and up to and
including 10,000

50*^
Above 10,000

and up to
and including 1,00,000

100
Above 10,000 and

up to and
including 1,00,000

100*^

Above 1,00,000

150

Above 1,00,000
Left to the
banks to decide
* No change.
^ All inclusive maximum amount chargeable by banks to the customers.






(c)  Service  Charges  for  Cheque  Collection  under  Speed  Clearing  (by  Collecting  Banks  from customers)

Existing (Rs.)
Revised (Rs.)




Service charge from all customers




Service charge from Savings a/c customers
Up to

and including
1,00,000

Nil
Up to and including
1,00,000

Nil*

Above 1,00,000

150

Above 1,00,000
Left to the
banks to decide
* No change.


The implications of this Notification:

A)    Hectic strategic sessions to draw up the new Service Charge Structure.

B)    Minor Programming changes might be required, as almost all Banks are on Core Banking Solutions (CBS)

C)    Frequent revision of Service Charges depending on the competition.

D)   Accelerate the migration from Paper Mode to Electronic Mode.

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