Introduction:

Technological progress in payment and settlement systems and the qualitative changes in operational systems and processes that have been undertaken by various players in the market have enabled market forces of competition to come into play to improve efficiencies in providing better service to the users of the system. It will be the bank’s endeavor to offer services to its customers with best possible utilization of its technology infrastructure. Withdrawal of the Reserve Bank of India instructions to banks on time frame for collection of outstation cheques, payment of interest on delayed collection of outstation cheques/instruments, with effect from 1st November, 2004, had offered bank further opportunities to increase its efficiency for better performance. This Compensation policy of the bank is therefore, designed to cover areas relating to unauthorized debiting of account, payment of interest to customers for delayed collection of cheques / instruments, payment of cheques after acknowledgement of stop payment instructions, remittances within India, foreign exchange services, etc. The policy is based on principles of transparency and fairness in the treatment of customers. 

The objective of this policy is to establish a system whereby the bank compensates the customer for any financial loss he / she might incur due to deficiency in service on the part of the bank or any act of omission or commission directly attributable to the bank. By ensuring that the customer is compensated without having to ask for it, the bank expects instances when the customer has to approach Banking Ombudsman or any other Forum for redressal to come down significantly. 

It is reiterated that the policy covers only compensation for financial losses which customers might incur due to deficiency in the services offered by the bank which can be measured directly and as such the commitments under this policy are without prejudice to any right the bank will have in defending its position before any forum duly constituted to adjudicate banker-customer disputes.

If the bank has raised an unauthorized / erroneous direct debit to an account, the entry will be reversed immediately on being informed of the erroneous debit, after verifying the position. In the event the unauthorized / erroneous debit has resulted in a financial loss for the customer by way of 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, the bank will compensate the customer for such loss. Further, if the customer has suffered any financial loss incidental to return of a cheque or failure of direct debit instructions due to insufficiency of balance on account of the unauthorized/erroneous debit, the bank will compensate the customer to the extent of such reasonably determined financial losses.

In case verification of the entry reported to be 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 7 working days from the date of reporting of erroneous debit. In case, the verification involves a third party, the bank shall complete the verification process within a maximum period of one month from the date of reporting of erroneous transaction by the customer. 
In case of complaints where a Credit Card holder protests any transaction on his Credit Card the Bank would provide explanation and if necessary documentary evidence to the customer within a period of 60 days. Erroneous transactions reported by Card holders in respect of Card operations which require reference to a merchant establishment/ATM other than belonging to Bank of India will be handled as per rules laid down by Master Card International/VISA International as the case may be. The Card holder based on his Credit Card Statement would be required to inform the Bank within 60 (sixty) days his disputed transaction. As per the prevailing rules of Master Card and VISA a maximum 45 days are necessary for the acquiring bank to respond with necessary charge-slips/documents relating to a transaction by the Card holder. A reference to this is also printed on the reverse side of the Credit Card Statement for the benefit of the Card holders.

In respect of claims by the customer (card holder) due to usage of cards at ATMs involving net work/s of ATMs of our Bank and other Banks/ Bank groups such as Cash Tree, BANCS, State Bank of India network arrangements / any other arrangement made in future, process of verification shall be undertaken as per the arrangement amongst the member banks to settle the claims.

The bank will undertake to carry out direct debit/ECS debit instructions of customers in time. In the event the bank fails to meet such commitments customer will be compensated with a reasonably determined financial loss that he may incur on account of delay in carrying out the instructions / failure to carry out the instructions.

The bank would debit the customer’s account with any applicable service charge as per the schedule of charges notified by the bank. In the event the bank levies any charge in violation of the arrangement, the bank will reverse the charges when pointed out by the customer subject to scrutiny of agreed terms and conditions. Any consequential financial loss to the customer will also be compensated as provided under para.1 above.

Where it is established that the bank had issued and activated a credit card without written consent of the recipient, the bank would not only reverse the charges immediately but also pay a penalty without demur to the recipient amounting to twice the value of charges reversed.

In case a cheque has been paid after stop payment instruction is acknowledged by the bank, the bank shall reverse the transaction and give value-dated credit to protect the interest of the customer. Any consequential financial loss to the customer will be compensated as provided under para 1 above. Such debits will be reversed within 2 working days of the customer intimating the transaction to the bank.

The Bank would not compensate the customer for delays in collection of cheques designated in foreign currencies sent to foreign countries as the bank would not be able to ensure timely credit from overseas banks. It is the bank’s experience that time for collection of instruments drawn on banks in foreign countries differ from country to country and even within a country, from place to place. The time norms for return of instruments cleared provisionally also vary from country to country. Bank however, would consider upfront credit against such instrument by purchasing the cheque/instrument, provided the conduct of the account has been satisfactory in the past.

However, the bank will compensate the customer for undue delays in affording credit once proceeds are credited to the Nostro Account of the bank with its correspondent. Such compensation will be given for delays beyond one week from the date of credit to Nostro Account / due date after taking into account normal hold period stipulated. The compensation in such cases will be worked out as follows :

a) interest for the delay in crediting proceeds as indicated in the collection policy of the bank.

b) Compensation for any possible loss on account of adverse movement in foreign exchange rate.

The ‘Normal hold period’ as stipulated for various countries in case of collection of foreign cheques is given below. This Hold Period is applicable from the date of credit to our nostro accounts by Correspondent Banks / branches.