Indian Clearing System – Introduction of new Return Reason 88

            With the adoption of Uniform Holiday Calendar under Cheque Truncation System (CTS), a new Return Reason has been introduced.

Under CTS, inward clearing is generally processed in a centralised manner by banks at the CTS location.

However, in exceptional cases, where the reference to base branch is required and the base branch is closed on account of local holiday, the drawee bank at the grid location may return the instrument to the presenting bank under return reason code 88 as enumerated in annexure D of Uniform Regulations and Rules for Bankers' Clearing Houses with the description “need reference to the drawee branch which is closed on account of local holidays/issues”.

Return Reason 88 will be a technical return reason, and will have to re-present by the Presenting Bank, without the physical cheque being returned to the customers.

Drawee Banks have to be very careful while choosing this return reason as the onus will be on them, to prove that there was a holiday in the Base Branch state, in case of any dispute.