Pay interest for delay in dollar-denominated cheques: RBI

MUMBAI: Acknowledging the customer complaints on delay in collection of dollar-denominated cheques, the Reserve Bank on Wednesday asked all urban co-operative banks to revamp their cheque collection system and pay interest in case of delay.

"It has been decided that authorised dealer UCBs... shall make the USD currency collection scheme transparent and a part of their regular cheque collection policy," the central bank said in a communication.

The apex bank further asked them to review their collection policies on a regular basis and explore using faster methods of realisation so as to save time.

It also said the UCBs will have to pay interest on the amount of cheques from the date of sighting credit in their nostro account till the amount is credited in customers account, which will be paid at saving bank rate.

Nostro account is kept by customers for parallel record of their cheque amounts or credit card.

"UCBs may formulate a policy on 'instant' credit for small value cheques as a part of their USD cheque collection policy," the central bank said.

Also, in case there is any delay in the cheque collection, the customer will be paid compensation in form of additional interest, "without the customer requesting for the same," the statement said.

Among other options, the central bank said, the UCBs could also form pool of such cheques and could avail of benefits like reduced infrastructure costs and collection time.