When banks lose your cheque... ::Business Line

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You have a right to ask the bank to reimburse you for expenses related to obtaining duplicate instruments and also interest for reasonable delay occurred in obtaining the same.

You receive a cheque and drop it with your banker for collection. Have you ever thought that it could get lost? Lost, not because someone stole it, but because it has been missed in transit from the bank where you have your account to the bank which is supposed to pay you the money.

Well, nothing is impossible. The case of one such customer, call him Ram, is recounted in the 2010-11 Annual Report of the Banking Ombudsman released recently.

A cheque for Rs 40,000 was deposited by Ram in his home bank and was lost in transit when sent for collection.

If you too are caught in a similar situation, it helps to know what your rights and your banker's duties are.

First, according to the ‘master circular on customer service' issued by the Reserve Bank, when the cheque is lost in transit or in the clearing process at the paying banker's branch, it is the duty of your bank to immediately bring it to your notice.

In case your bank fails to do that, keep this as a thumb rule – if you have deposited a local cheque, RBI rules say that credit should be given on the same day or utmost, the next day. For outstation cheques, the maximum timeframe for collection of cheques drawn on State capitals/major cities/other locations is 7/10/14 days respectively.

So, if the amount has not reached your account within the mandated days, you can immediately approach your bank to find out what is wrong.

Two, the onus of such loss lies with the collecting banker and not with the account-holder.

This means that it is your bank's duty to follow-up and make good the loss within an agreeable time-frame.

Three, you also have a right to ask the bank to reimburse you for expenses related to obtaining duplicate instruments and also interest for reasonable delays occurred in obtaining the same.

In Ram's case, the bank assured Ram that the proceeds will be credited within a month.

But even after a month, despite Ram's regular correspondence and frequent visits to the branch, nothing happened.

He had no choice but to approach the ombudsman.

In the conciliation meeting, the bank indicated that they did take up the matter for follow-up and submitted documents in support of their claims of having initiated action to obtain a duplicate cheque.

However, considering the delay, the ombudsman ordered the bank to pay the Rs 40,000 to Ram along with interest of 2 per cent above the corresponding term deposit rate for the delayed period and Rs 5, 000 as service gesture.