Banks told to pay for delay in cheque clearance | india | Hindustan Times
Today in New Delhi, India
Jan 19, 2017-Thursday
New Delhi
  • Humidity
  • Wind

Banks told to pay for delay in cheque clearance

india Updated: Jul 17, 2008 01:21 IST
Satya Prakash
Satya Prakash
Hindustan Times
Highlight Story

Banks have to credit local cheques to your account the same day or at the most the next day, the national consumer court has ordered. And outstation cheques have to be encashed between seven and 14 days, depending upon the distance from the place where the cheque is issued.

You can claim interest from a bank for delayed encashment of your outstation cheques. “If there is any delay in collection of the said (outstation) cheques beyond the period… interest at 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,” the National Consumer Disputes Redressal Commission said in its July 14 order.

Advocate Atul Nanda, on whose petition the landmark judgment came, said banks would have to pay interest to customers for delayed encashment of local cheques as well. It usually takes up to three days to be encashed. In his consumer interest litigation, Nanda had said the delay in crediting the cheques to the customers’ account was leading to “undue enrichment” of banks, which were earning crores in interest on the customers’ money for the delayed period.

Directing the banks to comply with the order within two weeks, commission chairman Justice M.B. Shah asked them to write in bold letters in every branch’s notice board the salient features of their policies on collection period of outstation cheques and interest payable in case of delay. He asked the RBI to monitor the order.