CHEQUE COLLECTION POLICY

INTRODUCTION

YES Bank’s Cheque collection policy is a reflection of on-going efforts to provide best in class
service to our customers and set higher standards for performance. The policy is based on
principles of transparency and fairness in the treatment of customers. We are committed to
increased use of technology to provide quick collection services to our customers. This policy
document covers the following aspects:

• Collection of cheques (including cheque purchased) and other instruments payable

locally, at centers within India and abroad.
• Our commitment regarding Time norms for collection of instruments.
• Payment of interest in cases where there is delay beyond time norms in realization of
proceeds of outstation instruments/local cheques.
• Dealing with collection instruments lost in transit.

A copy of the CCP (Cheque collection policy) shall be made available to the customer upon
request. Additionally, copy of CCP shall be made available on website and branch Notice Board.

ARRANGEMENTS FOR COLLECTION OF DOMESTIC CHEQUES

1. Collection of Local Cheques

All Cheques, DD’s, Pay orders and other Negotiable Instruments which are payable under grid
system payable locally would be presented through the clearing system prevailing at the
respective collection centre. Cheques, which are deposited at branch counters and in ATM drop
boxes within the branch premises, before the specified cut-off time displayed at the branches, will
be presented for clearing on the same day. Cut-off timings may vary from branch to branch.

Cheques deposited after the cut-off time, at branch including drop box at ATMs stationed inside
the Branch premises and in collection boxes outside the branch premises including cheques
deposited in drop box at off-site ATMs will be presented in the next clearing cycle.

For local cheques, credit will be given on the same day or at the most the next working day of
their presentation in clearing. For these cheques, bank will permit usage of the shadow credit
afforded to the customer accounts immediately after closure of relative return clearing or as per
the specific arrangement agreed with the customer.

Withdrawal will be allowed on the same day or maximum within an hour of commencement of
business on the next working day, subject to usual safeguards and unless otherwise agreed with
the customer However, in exceptional cases, this arrangement may be subject to extension of
return clearing timings by clearing house and may lead to delay in crediting customer’s account
and allowing withdrawals. Withdrawal of amounts so credited would be permitted as per the
cheque return schedule of the respective clearing house.

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The respective branches will display the cut-off time for receipt of cheques to be sent in clearing
on the same day in their premises. The cut-off time for collection of cheques from drop boxes
installed at off-site ATM will be displayed on the face of the drop boxes.

CTS Cheques

Under ‘Cheque Truncation System (CTS)’ instead of presenting cheque in physical form, image of
cheque is presented to the Drawee Bank. The original cheque remains in the custody of the
Collecting Bank. Drawee Bank processes the instrument using the image.

To guard against fraudulent activities and also to facilitate smooth functioning of the clearing in
CTS environment, uniformity in the size, design and the security features on the cheque issued
by all banks to their customers has been brought in. These cheques are called as ‘CTS-2010
Standard Cheques’.

For the purpose of CTS Clearing, RBI has directed that no changes/corrections should be carried
out on the cheque. Therefore, customers are advised to use fresh cheque forms in case of any
changes in the payee's name, courtesy amount (amount in figures) or legal amount (amount in
words) etc. This will help Banks identify and control fraudulent alterations. However, these
restrictions will not applicable to cheques cleared under other clearing arrangements or direct
collection of cheques outside the Clearing House Arrangement.

2. Collection of Outstation Cheques

Cheques drawn on other banks at outstation centres, which cannot be collected locally, will
normally be collected through YES Bank’s branches at those centres. Where YES bank does not
have a branch of its own, the instrument would be sent for collection to the drawee bank or
collected through a correspondent bank.

Cheques drawn on Bank’s own branches at outstation centres will be collected using the inter
branch arrangements in vogue. Branches which are connected through a centralized processing
arrangement and are offering anywhere banking services to its customers will provide same day
credit to its customers in respect of outstation instruments drawn on CBS network branches if
received in the branch before specified cut off time.

Time frame for collection of outstation cheques is defined below:

Where applicable the clearance of the cheque may take 7 to 14 days (excluding intervening
holidays) depending upon the location on which cheque is drawn (i.e. state capitals, major cities
and other locations).

Customer account will be credited upon realization of cheque/instrument. Outstation cheques

will be paid subject to recovery of service charges and GST, as applicable to the account or as
agreed with the customer. However, such charges shall not be exceed the service charges
prescribed by RBI for Outstation Collection. No additional charges, P&T, Courier charges etc.
shall be recovered.

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The credit timelines and process of all types of cheques may vary in case of Cash Management
arrangements and the same would be applicable as per the agreed arrangement.

3. Immediate Credit of outstation Cheques/Instruments

• Branches/extension counters of the bank will consider providing immediate credit for
outstation cheques/instruments up to the aggregate value of Rs. 15000/- tendered for
collection by KYC compliant individual account holders subject to satisfactory conduct of
such accounts for a period not less than 6 months.
• Immediate credit will be provided against such collection instruments at the specific request
of the customer or as per prior arrangement.
• The facility of immediate credit would also be made available in respect of local cheques at
centres where no formal clearing house exist.
• The credit given under this facility should not exceed Rs. 15000/- per customer (The facility of
immediate credit will be offered in Savings/Current/Cash Credit/Overdraft Accounts of the
customers. For extending this facility there will not be any separate stipulation of minimum
balance in the account.
• The facility of immediate credit will be offered across all Branches and Extension Counters of
YES Bank
• Under this policy, prepaid instruments like Demand Drafts, Interest/Dividend/warrants of
other Banks shall be treated at par with cheques.
• For the purpose of this Policy, a satisfactorily conducted account shall be the one which
qualifies successfully on all of the following parameters
o Opened at least six months earlier and complying with KYC norms on the date of
immediate credit
o Conduct of account has been satisfactory and bank has not noticed any irregular
dealings
o Where no cheques/instruments for which immediate credit was afforded returned
unpaid for financial reasons
o Where the bank has not experienced any difficulty in recovery of any amount
advanced in the past including cheques returned after giving immediate credit
• Bank shall levy normal collection charges and out of pocket expenses while providing
immediate credit against outstation instruments tendered for collection. Exchange charges
applicable for cheques purchase will not, however be charged.
• Taxes such as GST, applicable on charges will also be recovered from the customer.
• Immediate credit facility will be provided in account holder’s base branch only
• The facility of immediate credit would not be offered in following cases
o For collection of cheques drawn at locations where no YES Bank Branch is available
o For accounts which are denominated in foreign currency

o For cheques which are postdated, out of date or nearing out of date, due to avoid risk
of return of the instrument.
o For accounts in inoperative status
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 o For cheques of value greater than Rs. 15,000, i.e. no partial immediate credit for
cheques
o For cheque drawn by customer on his own account with another bank
o For cheque drawn on any YES bank branch
o For cheque which can be presented in the local clearing

4. Charging of Interest on cheques returned unpaid where immediate credit was given

• If a cheque sent for collection for which immediate credit was provided by the bank is
returned unpaid, the value of the cheque and applicable charges with respect to rejection and
return of the cheque/instrument will be immediately debited to the customer’s account
• Taxes such as GST, applicable on charges will also be recovered from the customer.
• Interest at standard overdraft rate applicable on the date of recovery would be charged on the
notional overdrawn balances in the account, had credit not been given initially
• If the proceeds of the cheque were credited in the Savings/Current Account and was not
withdrawn, the amount so credited will not qualify for payment of interest upon return of the
unpaid cheque. However if the funds were withdrawn, in the event of dishonour of cheque
against which immediate credit was provided, interest shall be recoverable from the customer
for the period the bank remained out of funds at the rate applicable for Clean overdraft limits
sanctioned for individual customers, as per YES Bank’s extant credit policy.

COLLECTION OF CHEQUES PAYABLE AT / DRAWN ON FOREIGN COUNTRIES

Cheques payable at foreign locations, where the bank has Correspondent Banking arrangements,
will be collected through correspondent banks. Cheques drawn on foreign banks at centres where
the bank or its correspondents do not have direct presence will be sent directly to the drawee
bank with instructions to credit proceeds to the respective Nostro Account of the bank
maintained with one of the correspondent banks.

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 1. Timelines for collection of cheques payable at foreign locations

Currency Amount (per unit Collection and Credit Arrangement

of
currency)
USD (Minimum • Immediate credit to customer’s account after
amount of USD sighting the funds in our Nostro account under
50 and Final Credit Services arrangement. No value dated
Maximum amount credit will be allowed.
USD • Minimum turnaround time for Cheque clearing: o
350000) 6-10 business days on cheque drawn on Wells
Fargo’s ABAs, drawee banks located in New York
City or Philadelphia o 15-20 business days on
cheque drawn on other banks

GBP/EUR Any Amount • Cooling period of 10 international working days

after credit received in YBL Nostro account. Value
dated credit will not be allowed.
• Cheques will be sent under Cash Letter facility of
our respective correspondent banks.
CAD/SGD/JPY upto 250 • Cooling period of 10 international working days
after credit received in YBL Nostro account. Value
dated credit will not be allowed.
• Cheques will be sent under Cash Letter facility of
our respective correspondent banks.
CAD/SGD/JPY more than 250 • Immediate credit to customer’s account will be
post cooling period of 10 International working
days after sighting funds in our Nostro account.
No value dated credit will be allowed
• Approximately 20-25 international working days
are taken for clearing.
• Cheques will be sent under Collection facility of
our respective correspondent banks

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2. Important Notes:

• Charges towards collection of the instrument will be borne by the customer as per schedule of
charges applicable to the account or as specific agreement with the customer
• Customer will be liable to pay the Bank all such expenses which the bank may have incurred
towards collection of the instrument if the cheque tendered for collection / purchase is
returned unpaid.
• Instances in which returned cheques are lost in transit; correspondent bank charges will be
borne by the customer debited to the customer's account on the basis of the nonpayment
advice received from the correspondent bank.
• Fee and Service charges as defined in the applicable Schedule of charges as amended from
time to time would be levied. The conversion rate applicable would be the applicable card
rate/forex rate provided by treasury as on the date of credit to the customer account Taxes
such as GST, applicable on charges will also be recovered from the customer.
• The clearing day starts when the physical cheque is received at the foreign corresponding
bank end for clearing on whose name the cheque is drawn
• For USD Cheque amounts greater than USD 350,000 customers are advised to use the TT /
Wire Transfer route.
• The Bank will not be liable for any interest, charges, cost, fees deducted from cheques
proceeds, or any delay in receipt of the cheque proceeds with respect to the cheque sent
abroad for clearing.
• The Bank will not be liable if the cheque presented for clearing is returned by the overseas
bank for inability to process the cheque for whatsoever reason.
• The Bank will not provide upfront credit by purchasing cheque payable at or drawn on
foreign country even if the conduct of the account has been satisfactory
• Immediate credit of foreign currency instruments will not be permitted, given the inherent
risks involved in the transaction. For low value instruments, base branch of YES Bank may at
its discretion, waive the cooling period, if any, provided conduct of the account is satisfactory
as mentioned in the section for immediate credit of outstation cheques/instruments.
• Payment of Interest for delayed collection of cheques payable outside India will be done as
per extant Compensation Policy available on YES Bank website
(https://www.yesbank.in/regulatory_policies).

COLLECTION OF THIRD PARTY CHEQUE

Bank will not collect account payee cheques for any person other than the payee constituent.
The above clause will also be applicable to Drafts, Pay Orders and Banker’s cheques.

PURCHASE OF LOCAL/OUTSTATION CHEQUES

• Bank may, at its discretion, purchase local/outstation cheques tendered for collection at the
specific request of the customer or as per prior arrangement. Besides satisfactory conduct and

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 creditworthiness of the account holder, the standing of the drawer of the cheque will also be a
factor considered while purchasing the cheque

CHEQUES / INSTRUMENTS LOST IN TRANSIT / IN CLEARING PROCESS OR AT

PAYING BANK’S BRANCH

• In the event a cheque or an instrument accepted for collection is lost in transit or in the
clearing process or at the paying bank’s branch, the bank shall within 24 hours on coming to
know of the loss, bring the same to the notice of the accountholder so that the accountholder
can inform the drawer to record stop payment.
• The bank would provide all possible assistance to the customer to obtain a duplicate
instrument from the drawer of the cheque like giving a certificate regarding loss of the cheque
etc.
• The bank would also compensate the customer for any reasonable charges he/she incurs in
getting duplicate cheque/instrument upon production of receipt, in the event the instrument
is to be obtained from a bank/ institution who would charge a fee for issue of duplicate
instrument. The charges incurred for making stop payment of the lost cheque by the customer
with the Paying Bank will be compensated by the Bank.
• If the cheque / instrument has been lost at the paying bank's branch, the collecting banker
should have a right to recover the amount reimbursed to the customer for the loss of the
cheque / instrument from the paying banker.
• Compensation, if any, will be paid by YES bank in accordance with its extant compensation
policy available on YES Bank website (https://www.yesbank.in/regulatory_policies).

DELAY IN RE-PRESENTATION OF TECHNICAL RETURN CHEQUES AND LEVY OF

CHARGES FOR SUCH RETURNS

The bank will levy cheque return charges only in cases where the customer is at fault and is
responsible for such returns. An illustrative list of returns, where the customers are not at fault
are indicated in Annexure- I. Taxes such as GST, applicable on charges will also be recovered
from the customer.

Further in cases where the cheques need to be re-presented without any recourse to the payee,
such re-presentation will be made in the immediate next clearing presentation not later than 24
hours (excluding holidays).

COMPENSATION ON LOSS OF INSTRUMENTS OR DELAYED PRESENTATION

YES BANK Ltd will take remedial steps to compensate the customer, using variety of modes like
value dating the credit or payment of interest etc. Interest for delayed collection shall be paid as
per the bank's Compensation Policy as per prescribed RBI guidelines.

Compensation by way of interest payment, where necessary, shall be made without any claim
from the customer.

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MISCELLANEOUS

• Cheques which are deposited with wrong account number mentioned on the Pay-in slip,
where bank is not able to identify the customer, will return the cheque to the customer on
receipt of valid claim after verification.

• In cases with incomplete address, incomplete phone no., no phone number mentioned on
the Pay-in slip, the bank will be responsible to keep these instruments for a maximum
period of 3 months.

• Cheques received back unpaid will be returned by post/ courier etc. to the customer
within 24- 48 working hours on the address recorded in Bank’s database. However, these
will be kept in the Bank for returning to the customer over the counter if he/she makes a
request for the same. If not collected by the customer within 15 days bank will send them
back at the recorded address by post or courier.

• The Bank shall not make payment of cheques presented beyond the period of three
months from the date of such instrument.

SERVICE CHARGES

For all collection services the bank will recover appropriate service charges as decided by the
bank from time to time and communicated to customer, displayed on Bank’s website. Taxes such
as GST, applicable on charges will also be recovered from the customer.

FORCE MAJEURE

The bank shall not be liable to compensate customers for delayed credit if some unforeseen event
(including but not limited to civil commotion, sabotage, lockout, strike or other labour
disturbances, accident, fires, natural disasters or other “Acts of God”, war, damage to the bank’s
facilities or of its correspondent bank(s), absence of the usual means of communication or all
types of transportation, etc.) beyond the control of the bank prevents it from performing its
obligations within the specified service delivery parameters.

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ILLUSTRATIVE BUT NOT EXHAUSTIVE LIST OF OBJECTIONS WHERE CUSTOMERS
ARE NOT AT FAULT (ANNEXURE-I)

Code Reason for Return

No.
35 Clearing House stamp / date required
36 Wrongly delivered / not drawn on us
37 Present in proper zone
39 Image not clear; present again with paper
40 Present with document
41 Item listed twice
42 Paper not received
67 Payee’s endorsement irregular / requires collecting bank’s confirmation
76 Required information not legible / correct
82 Bank / Branch blocked
84 Other reasons-connectivity failure
92 Bank excluded

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