Compensate customers for delayed cheque clearance, RBI tells banks

In a step that will be hugely welcomed by bank customers, the Reserve Bank of India has directed banks to compensate customers for delay in clearance of local cheques.

For delays in clearance of local cheques, under the RBI directive, banks would be required to pay compensation at savings bank interest rate in the absence of a specified rate.

"In case, no rate is specified in the Cheque Collection Policies (CCP) for delay in realisation of local cheques, compensation at savings bank interest rate shall be paid for the corresponding period of delay," RBI said in a release on Monday.

Banks have also been advised to reframe their CCPs specifying details regarding timeline for clearance of local cheques and compensation for delay and display them on their web sites.

"...Banks are advised to re-frame their CCPs to include compensation payable for the delayed period in the case of collection of local cheques as well," RBI said.

The notification has been issued by the central bank considering the difficulties being faced by customers with regard to cheque clearances.