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Collection of Oustation Check

The document discusses the process of collecting outstation checks. There are two types of outstation check collection: 1) when the collecting bank has a branch where the check is payable and 2) when it does not have a branch there. In the first case, the check is sent to the collecting bank's local branch, which collects from the paying bank. In the second case, the check is sent directly to the paying bank, which sends funds via demand draft to the collecting bank. The collecting bank then credits the customer's account after clearing the demand draft. The document outlines the workflow, from a customer lodging a check to funds being credited or the check being returned. It also describes the process for creating a standing

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97 views4 pages

Collection of Oustation Check

The document discusses the process of collecting outstation checks. There are two types of outstation check collection: 1) when the collecting bank has a branch where the check is payable and 2) when it does not have a branch there. In the first case, the check is sent to the collecting bank's local branch, which collects from the paying bank. In the second case, the check is sent directly to the paying bank, which sends funds via demand draft to the collecting bank. The collecting bank then credits the customer's account after clearing the demand draft. The document outlines the workflow, from a customer lodging a check to funds being credited or the check being returned. It also describes the process for creating a standing

Uploaded by

RedSun
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Collection of Outstation Check

Collection of Outstation Check


Introduction
A customer(‘Payee’) may deposit a check payable to him but drawn on an outstation bank
branch for collection. The bank branch sending the check for collection is called ‘Collecting
Bank Branch’. The Bank branch to whom the check is sent for collection is called ‘Paying
Bank Branch’. Both the banks are different and located in different places. The person who
has issued the check is called ‘drawer’ and the person to whom the check is payable is
called as ‘payee’. Payee’s bank has to send the check for collection to Drawer’s Bank and
once the check is realized credit the proceeds of the check to the customer’s operative
account after deducting necessary charges. Outstation Check collection can be broadly
classified into two types –

a) Check payable at a place where collecting bank is having a branch.

b) Check payable at a place where collecting bank is not having a branch.

In case of ‘a’ above, the check is sent to collecting bank branch located in the place where the
check is payable. That branch would lodge the check for collection with the paying bank and
once check is passed by them, would credit the proceeds to the account of the customer and
inform the collecting branch.

In case of ‘b’ above, the check is sent directly to the ‘Paying bank branch’. Once the check is
passed, that bank would send the proceeds to the ‘Collecting bank branch’ through a Demand
draft . The ‘Collecting bank branch’ would then lodge the Demand draft in clearing and after
it is cleared, credit the proceeds to the account of the customer.
Collection of Outstation Check

Workflow

Workflow diagram for ‘Outstation cheque collection’:

Customer Lodges the Check for collection

Whether your bank has a branch where


the “Paying bank branch” is located?

NO
YES

Enter all the details in the System


Enter all the details in the System

Submit for Supervisor authorization


Submit for Supervisor authorization

Receive authorization confirmation


Receive authorization confirmation

Despatch the check to your branch Despatch the check directly to ‘Paying
Bank branch’

NO Check passed? Check passed? NO

YES
YES

Customer’s Account credited


Demand Draft received and lodged in
clearing

Return the Check to Customer

1. Confirm that request for creation for SI is properly signed by the Account holder in case
it is given by the customer.
Collection of Outstation Check

2. Verify whether the supervisor concerned has permitted creation of the SI.

3. Go to appropriate menu option in the application browser for ‘SI Creation’.

4. Enter the details on the screen in the relevant fields depending on the type of the SI.

5. Submit for authorization to the supervisor.

Creation of SI Process
MAIN SCREEN (Screen 1)

Fields:

Account No. (Mandatory)

Account holder name(Populated by the system)

SI Serial No.(Generated by the system)

SI Frequency(Mandatory from Pick list) Daily/Weekly/Monthly/Quarterly/Halfyearly/yearly

SI type(Mandatory) Radio buttons ‘Fixed Amount/Variable Amount’

Amount(Mandatory)Enabled if Radio button Fixed Amount is selected

Multiples of(Mandatory) Enabled if Radio button Variable Amount is selected

Maximum Amount(Mandatory) Enabled if Radio button Variable Amount is selected

Balance to be kept in the account(Mandatory) Enabled if Radio button Variable Amount is


selected

Maximum Amount(Mandatory) Enabled if Radio button Variable Amount is selected

Starting Date(Mandatory)

Ending Date(Mandatory)

Credit to(Mandatory) Radio buttons ‘Account/GL’

Credit Product(Mandatory from Pick list)Enabled if Radio button Account is selected

Credit Account(Mandatory)

Credit Account Holder name(System populated)

Narration(Mandatory)
Collection of Outstation Check

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