Outstation cheque realisation to cost more

Outstation cheque realisation to cost more

Beginning April 1, banks across the country will levy a higher service charge for clearing outstation and high-value cheques, following approval by the Reserve Bank of India.

Simply put, any outstation cheque of high value above Rs 1 lakh will attract a higher service charge according to an RBI circular which will come into effect from April Fools’ Day, though it was issued much earlier.

Currently, RBI does not allow banks to charge more than Rs 150 for speed clearing of a cheque worth over Rs 1 lakh, while no charges are applicable for cheque value up to Rs 1 lakh. However, speed clearing of cheques with value up to Rs 1 lakh would continue to remain exempt from any service charges.

RBI has also given a free hand to banks to decide on the service charge on outstation cheques of over Rs 1 lakh, as against a maximum limit of  Rs 150 per cheque allowed currently. At the same time, the Central bank has decided to lower the service charge for outstation cheques up to Rs 5,000 by allowing a levy of Rs 25 as against Rs 50 currently.

Outstation cheques between Rs 5,000 and Rs 10,000 would continue to attract a fee of
Rs 50, while those between  Rs 10,000 and Rs 1 lakh would continue to be levied a charge of Rs 100.

In the present context, speed clearing involves processing outstation cheques electronically without moving them from the city where they are presented to the drawee bank to a city where they are payable.

A drawee bank can charge up to Rs 1.50 per cheque for normal local clearing from Friday. For local clearing through cheque truncation system, which works electronically by processing the scanned image of the cheque, a drawee bank can levy a service charge of
Re 1 from April 1, up from 50 paise at present.

Besides, banks have been told to get approval from their respective boards for the service charge structure prior to fixing service charges not mandated herein.

“Charges fixed should be reasonable and computed on a cost-plus-basis and not as an arbitrary percentage of the value of the instrument. The service charges-structure should not be open ended and should clearly specify the maximum charges that would be levied on customers including charges if any, payable to other banks,” RBI has clarified.

The service charges by banks should be inclusive of all charges, including postal, courier and handling, other than service tax, it said.

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