COMPENSATION POLICY

(BANKING SERVICES)

Introduction
It has been the endeavour of the Bank to offer services to its customers with best
possible utilisation of its technology infrastructure. Withdrawal of RBIs instructions to
banks on time frame for collection of outstation cheques, payment of interest on delayed
collection of outstation cheques/instruments etc., with effect from 1st November, 2004
had given further scope for increasing efficiency for better performance.
Objective
The objective of the policy, namely SBICI Bank Ltd. Compensation Policy (Banking
Services) (hereinafter called the Policy), is to establish a system whereby the Bank
compensates the customer due to deficiency in service on the part of the Bank or any
act of omission or commission, directly attributable to the Bank.
Scope
The Policy is based on principles of transparency and fairness in the treatment of
customers. It is designed to cover deficiency in service in areas relating to account
operations, collections and remittances, fraud etc., as specified in this Policy.
Grant of compensation under this Policy is without prejudice to the Banks rights in
defending its position before any Court of Law, Tribunal or any other forum duly
constituted to adjudicate banker-customer disputes and does not constitute admission of
liability or any other issue, of any nature whatsoever for the purposes of Adjudicatory
proceedings.
Recognition of deficiency and compensation
a)

Unauthorised / Erroneous Debit

If the Bank has raised an unauthorized/ erroneous debit to an account, the entry
shall be reversed immediately on being detected/informed, after due verification.
If such a debit has resulted in reduction in the minimum balance applicable for
payment of interest on savings bank deposit or payment of additional interest to
the Bank in a loan account or levying of penalty for not maintaining the stipulated
minimum balance in the account, Bank shall compensate the customer to that

extent.

In case of return of a cheque or not carrying out of direct debit instructions due to
insufficiency of balance on account of the unauthorized / erroneous debit, Bank
will compensate the customer with an amount equivalent to interest calculated on
the unauthorised/erroneously debited amount at applicable Savings Bank rate,
minimum Rs.20/-, besides refunding the cheque return charges.

In case verification of the entry reported to be unauthorised/erroneous by the

customer does not involve a third party, the Bank shall arrange to complete the
process of verification within a maximum period of 3 working days from the date
of reporting of erroneous debit.

If it involves a third party, the Bank shall

complete the verification process within one month from the date of reporting of
unauthorised/erroneous transaction by the customer.

b)

ECS direct debits/other debits to accounts

The Bank undertakes to carry out, within the prescribed time, direct debit / ECS
(Electronic Clearing Service) debit instructions of customers. In the event of noncompliance/delayed compliance of instructions by the Bank to meet such
commitments, the customer will be compensated equivalent to interest calculated
on the amount to be debited, for the delayed period, at applicable Savings Bank
rate minimum Rs. 20/-, subject to a maximum of Rs. 1,000/-.

In the event the Bank levies any charge in violation of the arrangement/ or
inadvertently, the Bank will reverse the charges, subject to scrutiny of agreed
terms and conditions, and compensate the customer by a sum equal to the
charges reversed.

c)

Issue of ATM Cards

Where the Bank had issued and activated an ATM card without written consent of
the customer which has been disputed by the customer without using the card,
the Bank would not only reverse the charges, if levied, immediately but also pay
compensation to the customer minimum Rs 50/- and maximum Rs. 100/-.

d)

Payment of Cheques after Acknowledgement of Stop Payment Instructions

In case a cheque has been paid after stop payment instruction is acknowledged
by the Bank, the Bank shall reverse the debit with value dated credit within two

working days of the customer intimating the transaction to the Bank and also
compensate the customer with Rs.100/-.
e)

Collection of cheque drawn on foreign countries

As time for collection of instruments drawn on banks in different countries vary

and even within a country from place to place, delay in collection of cheques
payable at foreign centres will be construed if the customers account is not
credited within 10 working days, excluding Saturdays, from the date of clear
credit to the Banks Nostro account i.e. after taking into account the prescribed
cooling period for that currency, with the correspondent.

The compensation on account of delays in collection of instruments in foreign

currency would be as detailed below:

i)

At 5% p.a. if the period of delay is beyond prescribed collection period and

upto 45 days where proceeds of the instruments are to be credited to the
deposit accounts.

ii)

In case of abnormal delay i.e. delays exceeding 45 days, interest will be paid
at 1% above the specified rate (i.e. 5% p.a.).

iii)

In the event of the proceeds of cheque under collection being required to be

credited to an overdraft / loan account of the customer, interest will be paid at
interest rate applicable to the loan account or SBICI PLR, whichever is lower.

iv)

For abnormal delays i.e beyond 45 days, interest will be paid at the rate of
1% above the applicable interest rate to the loan account or PLR, whichever
is lower.

Such interest shall be payable with a minimum of Rs. 20/-.

No separate compensation is payable by the Bank on account of movement in the
values of the respective currency.
f)

Collection of cheques payable in India

The compensation on account of delays in collection of instruments drawn and

payable in India for individual account holders will be as per Cheque Collection
Policy and in respect of other account holders it would be paid as detailed below:

i)

At 5% p.a. if the period of delay is beyond prescribed collection period and

upto 45 days where proceeds of the instruments are to be credited to the
deposit accounts.

ii)

In case of abnormal delay i.e. delays exceeding 45 days, interest will be paid
at 1% above the specified rate (i.e. 5% p.a.).

iii)

In the event of the proceeds of cheque under collection being required to be

credited to an overdraft / loan account of the customer, interest will be paid at
the applicable interest rate or PLR, whichever is lower.

iv)

For abnormal delays, interest will be paid at the rate of 1% above at the
applicable interest rate or PLR, whichever is lower.

Such interest shall be payable with a minimum of Rs. 20/-.

Compensation as detailed above shall be paid without any formal demand from
customers and there shall be no distinction between instruments drawn on the Banks
own branches or on other banks which are payable in India.
g)

Cheques / Instruments lost while in Banks custody

In the event a cheque or an instrument accepted for collection is lost in Banks

custody or in transit, Bank shall, immediately on coming to know of the loss of
instrument, notify the customer and shall, simultaneously, advise the drawee
bank particulars of lost cheques for exercising caution against payment and
provide assistance to the customer to obtain a duplicate instrument from the
drawer / maker of the instrument.

The Bank will compensate the account holder in respect of instruments lost while
in its custody as detailed below:

i)

In case intimation regarding loss of instrument is conveyed to the customer

beyond the time limit stipulated for collection, as per the Cheque Collection
Policy of the Bank, interest will be paid for the period beyond the stipulated
collection period at the rates specified in para (f) above for cheques payable
in India and at rates specified at para (e) above in regard to cheques payable
abroad.

ii)

Bank will pay interest on the amount of the cheque for a further period
of 15 days at Savings Bank rate to provide for possible further delay in
obtaining duplicate cheque / instrument and collection thereof.

iii)

The Bank will bear the actual charges of recording Stop Payment instructions
levied by drawee bank.

iv)

The Bank would also reimburse the customer with actual charges levied by
the drawer/bank in issuing duplicate cheque/instrument, subject to a
maximum of Rs. 250/-.

Compensation for delay in other services

In respect of the following services provided to the customers, if the delay in providing
services is beyond twice the time norms, specified hereunder, compensation would be
payable as indicated hereinafter:
Sr.
No.
1.
2.
3.
4.

Services
Delay in issue of cheque book by Branch
Delay in providing banking services after receipt of
request / completed formalities, across the counter.
Delay in transfer of accounts
Delay in effecting remittances or crediting customers
account after receipt of funds

Time Norms
Beyond 3 working days
Beyond 3 working days
Beyond 14 working days
Beyond 2 working days

The compensation paid by the Bank will be Rs.100/- per instance, if the delay is upto
twice the specified time norm given above and Rs. 250/- per instance for delays
beyond twice the time norm.
Payment of at par cheques issued by other Banks
Bank will not pay any compensation, to the cheque holder, for dishonour of at par
cheques issued by other banks, including co-operative banks, in the absence of
adequate funds in the account on which cheques are issued even though the amount of
the cheque may have been paid to the bank which had issued the at par cheques.

Force Majeure
The Bank shall not be liable to compensate customers under this Policy if some
unforeseen event including but not limited to civil commotion, sabotage, lockout, strike or
other labour disturbances, accident, fire, natural disasters or other Acts of God, war,
damage to the Banks or its correspondent bank(s) systems, communication channels
etc. beyond the control of the Bank, prevents it from performing its obligations within the
specified service delivery parameters

7.

Redressal of Erroneous Debits arising on Fraudulent or Other

Transactions
i)

In case of any fraud, if the Bank is convinced that an

irregularity/fraud has been committed by our staff towards any
constituent, Bank will at once acknowledge its liability and pay the just
claim after investigating the matter.

ii)

In cases where the bank is at fault, the Bank will compensate the
customer without any demur

iii)

In cases, where neither the branch nor the customer is at fault but
the fault lies elsewhere in the system, Bank will compensate the
customer upto a maximum limit of Rs.500/-.

iv)

However, in all the cases stated in point nos. (i) to (iii) above, the
Branches are to put up the proposal for restoration of the fraudulent
amount/ compensation amount to the Working Committee of the
Board for approval.