Mumbai: Banks have to pay compensation to consumers for delay in encashment of outstation cheques, the National Consumer Commission has said in a ruling. The council also set a two-week time limit for banks to clear outstation cheques.

For local cheques, the commission directed banks to complete a transaction on the same day or at the most on the next day.

''If there is any delay in collection of outstation cheques beyond the period of 14 days, interest at the fixed deposit rate, or at a specified rate as per the respective policy of the banks is to be paid to the payee of the cheques," Justice M B Shah, chairman of the National Consumer Disputes Redressal Commission (NCDRC), said in his ruling.

The council also directed banks to display policy features with regard to the collection period of outstation cheques and interest due in case of a delay at every branch prominently.

''The salient features highlighting the rights of the consumers shall also be displayed on the notice board of each branch of the banks," Justice Shah said.

The commission's ruling came on a petition filed by advocate Atul Nanda, in which he claimed that there is deficiency in service by various banks in giving credit to the consumer when the cheque is encashed.