Show

FOREIGN CURRENCY OTHERN THAN USD

POLICY ON COLLECTION OF CHEQUES DENOMINATED IN FOREIGN CURRENCY OTHERN THAN USD

1. Collection of instruments drawn in Home Currencies of the Drawee Centre (other than US Dollar):

The instruments payable at the country of its currency i.e. like GBP instruments payable in UK is sent to the Nostro Correspondent Bank at the drawee centre for collection of the same.  As per this arrangement, the amount of the instrument is credited to our Nostro account immediately upon its presentation for payment to drawee bank by the Correspondent Bank, through clearing or collection.  Though amount is credited to our Nostro account, immediately the same is only on conditional basis and not a final credit.  Such instruments are treated as realized, only upon completion of the prescribed waiting period, as the paying bank has a time limit for returning the instrument for reasons like insufficiency of funds in the drawer's account, forged instruments, etc.

2. If the instruments are returned for any reason, the Correspondent Bank will debit the account with back value [i.e., the same value date as the original pass sheet credit] and additional charges for returning the instrument unpaid.  In order to safeguard, the waiting period concept is followed.  Accordingly the instrument is treated as realized only after expiry of waiting period after the date of pass sheet credit entry and adjust the realization after this waiting period.  This waiting period varies from country to country and where the instrument is payable which is as under:

Waiting Period:

GBP instruments payable in UK 10 business days from the value date
EURO instruments payable in Germany/Italy/ France/Netherlands 21 business days from the value date
Instruments in all other currencies payable at the Centres whose home currency is the currency of the instrument. 22 days from the value date

3. Handling Instruments Drawn on EURO Land:

    1. Cheques denominated in EURO currency and payable in Germany, Italy, Netherlands and France will be handled under Cash Letter Service.
    2. Each instrument including TCs, irrespective of its denomination, will be levied charges of EURO 1.00 per instrument for handling under Cash Letter Service.
    3. EURO cheques drawn on other countries will be handled only under 'under collection' basis.
    4. Cheques sent under collection normally take around 30 to 45 days for realization and charges are likely to be around EURO 50 per instrument.
    5. Unlike USD Cash Letter Service System, the Banks in Euro Land do not undertake 'no return- guaranteed payment' after a specified period.  Hence cheques beyond EURO 5000 are not handled under 'Cash Letter Service' and the same are handled only under collection basis.
    6. Endorsement by payee on the back of the cheque in the space provided is one of the conditions for collection of Euro cheques.

4. Instant Credit:

Subject to the satisfactory track record of the customer etc, immediate credit may be given to the customer's account, without completion of the cooling period, on citing the pass sheet credit for clean instruments denominated in GBP and EURO up to the equivalent of USD 10000.