Policy

Cheque Collection

Current Effective Date: Feb 2024

TABLE OF CONTENTS
1. Summary or Rationale.................................................................................................. 2
2. Policy Statements ........................................................................................................ 2
3. Credit of Local/Outstation/Foreign Cheques ................................................................. 2
3.1. Local Cheques: ....................................................................................................... 3
CORPORATE & INVESTMENT BANKING – TREASURY SERVICES

3.2. Outstation Cheques: ................................................................................................ 3

3.3. Cheques payable in foreign countries: ........................................................................ 3
3.4. Purchase of local / outstation cheques: ...................................................................... 4
3.5. Cheque Returns & Representment ............................................................................. 4
3.6. Third party cheques: ................................................................................................ 5
3.7. Validity period for Cheques / Drafts / Pay Orders / Banker's Cheques: .............................. 5
3.8. Service Charges: ..................................................................................................... 5
4. Time Frame for Collection of Local/Outstation/Foreign Cheques .................................. 5
4.1. Local Cheques (CTS Clearing) ................................................................................... 6
4.2. Outstation Cheques (Non-CTS Clearing): .................................................................... 6
4.3. Cheques drawn on foreign countries: ......................................................................... 6
5. Interest Payment for Delayed Collection....................................................................... 6
6. Legal and Other References ........................................................................................ 7
7. Firm References........................................................................................................... 8

Feb 2024

1
 1. Summary or Rationale
JPMorgan Chase Bank N.A., a scheduled commercial bank under the Reserve Bank of
India Act, 1934 acting through its branches in India (hereinafter referred to as “JPMCB
India”), currently offers commercial banking products and services only to the corporate
segment i.e., multi-national corporates as well as local Indian companies. As of now,
JPMCB India does not have a retail presence and hence no retail transactions for
individuals are undertaken.
JPMCB India is a direct member of the local clearing houses where it has its own branches
as well as RBI’s electronic payment platforms i.e., RTGS and NEFT.
As a part of its transaction banking services JPMCB India provides its corporate customers,
the facility to deposit local and outstation cheques for clearing.
JPMCB India’s Cheque Collection Policy has been prepared in compliance with RBI
circulars issued with respect to collection of cheques, namely, DBOD.No.Leg.BC.55/
09.07.005/2004-05 November 1, 2004 and DPSS.CO.No.453/03.05.06/2007-08,
September 17, 2007. For the sake of clarity, these have been quoted wherever necessary,
throughout this policy document.
Under this policy, prepaid instruments like Pay orders, Demand Drafts, Interest / Dividend
CORPORATE & INVESTMENT BANKING – TREASURY SERVICES

warrants shall be treated on par with cheques.

This policy only deals with JPMCB India’s corporate customers and addresses the needs of
this client segment for normal collections. As and when, JPMCB India enters the retail
banking business, this policy will be amended to address the interest of small depositors
adequately and in compliance with the directives issued in this regard.
As JPMCB India has only 4 branches in India, the above mentioned cheque collection
facilities are provided to corporate customers by way of arrangements with correspondent
banks.
This policy applies to the Bank from the date of approval at its Management Committee and
is subject to review annually. The gap between two reviews should not be more than 12
months. It may also be reviewed as and when felt necessary by the Management
Committee.

2. Policy Statements
• Credit of Local / Outstation / Foreign Cheques – This section includes the information on
Credit of various cheques including local and outstation cheques
• Timeframe for Collection of Local / Outstation / Foreign cheques – This section covers
the time frame fixed by JPMCB India for collection of local / outstation / foreign cheques
• Interest payment for Delayed Collection – This section outlines the instructions laid out
by JPMCB for payment of interest on account of delayed collection

3. Credit of Local/Outstation/Foreign Cheques

RBI vide Circular DBOD.No.Leg.BC.55/09.07.005/2004-05 dated November 1, 2004 has
withdrawn the instructions on immediate credit and left it to the individual banks to formulate
Feb 2024

2
 their own comprehensive and transparent policy on immediate credit of local and outstation
cheques. Accordingly, JPMCB India has framed its Policy on credit of local and outstation
cheques which is as set out herein below.

As mentioned earlier, JPMCB India being a wholesale bank caters only to the corporate
segment and hence, does not maintain any retail accounts of individuals. The cheques
deposited in the Bank, therefore, do not qualify as ‘small value retail cheques’. In view of
this, JPMCB India does not provide an immediate credit of cheques to its customers unless
specifically covered by a Cash Management Services (CMS) arrangement. Credit into the
account will be provided immediately after the clearing process is complete.

3.1. Local Cheques:

All local clearing cheques received within the cut off time will be processed and dispatched
to the clearing house on the same day. Clear funds will be made available into the
customer account after the return clearing process is completed.

In case of any general extension of returns by the clearing house or an exceptional event,
the clear funds will be made available to the customer after the status of the cheque is
CORPORATE & INVESTMENT BANKING – TREASURY SERVICES

known.

3.2. Outstation Cheques:

Since JPMCB India currently has limited branch presence, it has tied up with
correspondent bank(s) to support collection of outstation cheques on behalf of its
customers.

The funds will be credited to the customer on receipt of the funds from the correspondent
bank through RTGS / NEFT.

In case if the Bank is intimated, or identifies, by way of MIS received from the
correspondent bank(s), that the instrument sent on collection has been lost in transit, the
customer will be intimated in writing on the loss of cheques sent on collection. The copy of
the communication received from the drawee bank /collecting bank / courier /
correspondent bank will be provided to the client. The customer will be provided a “Non
Payment certificate”, on request, from the drawee bank, within a reasonable time.
Additionally, the Bank will provide all assistance to the customer to obtain duplicate
instrument from the drawer of the cheque.

3.3. Cheques payable in foreign countries:

Cheques payable at foreign centers where the Bank has branch operations (or banking
operations through a subsidiary, etc.) will be collected through that office.

The services of correspondent banks will be utilized in countries / centers where the
correspondent has presence. Cheques drawn on foreign banks at centers where the Bank
or its correspondents do not have direct presence will be sent directly to the drawee bank

Feb 2024

3
 with instructions to credit proceeds to the respective Nostro Account of the Bank
maintained with the correspondent bank(s).

3.4. Purchase of local / outstation cheques:

The Bank may, at its discretion, purchase local / outstation cheques tendered for collection
for customers with whom it has entered into specific Cash Management Services
arrangements

3.5. Cheque Returns & Representment

Cheque return charges shall be levied only in cases where the customer is at fault and is
responsible for such returns. The illustrative, but not exhaustive, list of returns, where the
customers are not at fault is indicated as under:
Code Number Reason for Return
33 Instrument mutilated; requires bank's guarantee

35 Clearing House stamp / date required

36 Wrongly delivered / not drawn on us

37 Present in proper zone

CORPORATE & INVESTMENT BANKING – TREASURY SERVICES

38 Instrument contains extraneous matter

39 Image not clear; present again with paper

40 Present with document

41 Item listed twice

42 Paper not received

60 Crossed to two banks

61 Crossing stamp not cancelled

62 Clearing stamp not cancelled

63 Instrument specially crossed to another bank

67 Payee’s endorsement irregular / requires collecting bank's

confirmation

68 Endorsement by mark / thumb impression requires attestation by

Magistrate with seal

70 Advice not received

71 Amount / Name differs on advice

72 Drawee bank's fund with sponsor bank insufficient (applicable to sub-

members)

73 Payee's separate discharge to bank required

74 Not payable till 1st proximo

75 Pay order requires counter signature

76 Required information not legible / correct

80 Bank's certificate ambiguous / incomplete / required

81 Draft lost by issuing office; confirmation required from issuing office

Feb 2024

4
 Code Number Reason for Return
82 Bank / Branch blocked

83 Digital Certificate validation failure

84 Other reasons-connectivity failure

87 ‘Payee's a/c Credited' - Stamp required

92 Bank excluded

Cheques that need to be re-presented without any recourse to the payee, shall be made in
the immediate next presentation clearing not later than 24 hours (excluding holidays) with
due notification to the customers of such representation through email or telephonic alerts.

3.6. Third party cheques:

Checks payable to a third party (account not with JP Morgan) are not accepted by the
Bank except for statutory refund cheques for non-residents who do not hold a bank
account in India.

3.7. Validity period for Cheques / Drafts / Pay Orders / Banker's Cheques:
CORPORATE & INVESTMENT BANKING – TREASURY SERVICES

Bank will handle cheques only if presented within 3 months from the date of such
instrument.

3.8. Service Charges:

• Local Instruments: NIL
• Outstation Instruments: Correspondent bank charges at actuals. Foreign Instruments:
0.25%, minimum Rs.100

Note:
• The above charges are specifically for the collections that are not handled under
specialized CMS arrangements.
• The contents of RBI’s notifications under Circular RBI/2010-11/377 DPSS.CO.CHD.
No. 1671 / 03.06.01 / 2010-11 (dated Jan 19 2011) and RBI/2011-12/560
DPSS.CO.CHD.No. / 2080 / 03.01.03 / 2011-12 (dated May 11,2012) have been made
note of. Since the prescriptions under these guidelines are applicable only to Savings
Accounts, the same will be implemented as and when the Bank offers Saving Accounts
to its customers.

4. Time Frame for Collection of Local/Outstation/Foreign Cheques

RBI vide Circular DBOD.No.Leg.BC.55/09.07.005/2004-05 dated November 1, 2004 has
withdrawn the instructions on time frame for cheque collections and left to the individual
banks to formulate their own comprehensive and transparent policy on the time frame for
the collection of local and outstation cheques. Accordingly, the time frame fixed by JPMCB
India for collection of local / outstation / foreign cheques is as given below:
Feb 2024

5
 4.1. Local Cheques (CTS Clearing)
On JPMCB India Branch Locations
Timings MICR Clearing
Cut off time for deposit (Day 0) 1:00 p.m. (10:00 a.m. on 1st, 3rd and 5th Saturday)

Credit into customer account Next working day (Day 1) evening, after return

For local checks, credit is given on the next day once the clearing process is complete and
check returns are received and processed.

4.2. Outstation Cheques (Non-CTS Clearing):

Cheques drawn on correspondent bank locations: The current arrangement covers more
than 2,500+ locations in the country. If a check is drawn from a location which does not
participate in CTS Clearing, then credit shall be passed to client subject to realization of
funds from the drawing bank. Check credits for remote locations can generally take 14
working days (excluding intervening holidays).

4.3. Cheques drawn on foreign countries:

CORPORATE & INVESTMENT BANKING – TREASURY SERVICES

Such instruments are accepted for collection on the “best of efforts” basis. The Bank may
enter into specific collection arrangements with its correspondent bank for speedy collection
of such instrument. The Bank will give credit to the party on credit of proceeds to the bank’s
Nostro with the correspondent bank after taking into account cooling periods as applicable
to the countries concerned. The Bank has however, provided approximate time frames for
cheques drawn on foreign countries and they are as mentioned below.
• For USD Cash letter (Cheques / Drafts issued by banks in NY): D+6 working days
• For USD Cash letter / Secured collection (i.e. USD Cheques/Drafts issued by any
other US bank): D + 15 working days
• For Pure / Standard Collections (all currencies as well as USD draft issued by non-US
bank): D+8 weeks (working days)

Note: D = date of deposit.

5. Interest Payment for Delayed Collection

Delayed Credit: Delayed credit will be construed as any credit given to the customer account
after the time frames stipulated in Section 3 above.

RBI vide their Circular DBOD.No.Leg.BC.55/09.07.005/2004-05 dated November 1, 2004

has withdrawn the earlier instructions on interest payment for delayed collection and left it to
individual banks to formulate their own comprehensive and transparent policy on interest
payment for delayed collection.

Feb 2024

6
 Accordingly, JPMCB India has framed the policy for payment of interest on account of
delayed collection as follows:
• 1) As collections will be handled only for corporate customers, the Bank will pay
interest at the Term Deposit rate applicable for the corresponding period for the
delayed period for the number of days indicated for realization for each category of
cheques(Refer Section 3 above) as on the date the cheque would have normally
realized.
• For foreign currency cheques, compensation shall be 2% above the general savings
bank rate in the market
• Instances of instruments lost / collection proceeds delayed in transit, will be dealt with
on a case by case basis.
• Interest will be rounded off to the nearest rupee and will be paid only when the amount
of interest is more than Rs.10/-
• Interest will be calculated on the value of the instrument sent for collection.
• Interest shall be calculated only for the period of delay above the days mentioned
above.
CORPORATE & INVESTMENT BANKING – TREASURY SERVICES

• 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 labor disturbances, accident, fire, 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,
Technical issues with Clearing Houses etc beyond the control of the Bank or its
correspondent bank(s) prevents it from performing its obligations within the specified
service delivery parameters.

Note: Instruments received from customers under specialized Cash Management Services
of the Bank will be subject terms and conditions that are mutually agreed between the Bank
and its customers.

6. Legal and Other References

.

Statutes, Laws, Rules, • RBI circulars DBOD.No.Leg.BC.55/ 09.07.005/2004-05 November 1, 2004

Regulations or External
• RBI circular DPSS.CO.No.453/03.05.06/2007-08, September 17, 2007
Guidance
• RBI Circular RBI/2010-11/377 DPSS.CO.CHD.No. 1671 / 03.06.01 / 2010-11 (dated
Jan 19 2011)
• RBI/2011-12/560 DPSS.CO.CHD.No. / 2080 / 03.01.03 / 2011-12 (dated May
11,2012)
• RBI Circular DPSS.CO.CHD.No.2030/03.06.01/2012-2013 dated May 7, 2013 on
Delay in Re-presentation of Technical Return Cheques and Levy of Charges for such
Returns

Feb 2024

7
 • DPSS.CO.CHD.No.284/03.06.03/2012-13 dated August 13, 2012 on Stipulation of
Compensation for delay in Clearance of Local Cheques
• RBI Master Circular on Customer Service in Banks dated July 1, 2015
• RBI Circular DPSS.CO.(CHD).No.873/03.09.01/2008-09 dated November 24, 2008

7. Firm References
Other Firm Policies or • This policy will have to be read together with all applicable policies of the Firm
Standards

Policy Supplements, • N/A

Procedures, and Other
Documents

Forms/Systems • N/A
CORPORATE & INVESTMENT BANKING – TREASURY SERVICES

Feb 2024