Ter­mi­nolo­gies Sim­pli­fied

Consumer Voice - - Bfsi -

SB ac­count with cheque­book fa­cil­ity: At the time of open­ing the sav­ings bank/home sav­ings bank ac­count, you are re­quired to in­di­cate whether you need cheque­book fa­cil­ity. This is to be in­di­cated be­cause there are other SB ac­counts such as SB with­out cheque­book fa­cil­ity and SB no-frills ac­count/SB un­der Jan Dhan Yo­jna (or SB ac­count with zero bal­ance). An SB ac­count with cheque­book fa­cil­ity will also re­quire the cus­tomer to al­ways keep a min­i­mum credit bal­ance (of money) in their ac­count so to keep the ac­count in ‘ac­tive’ sta­tus, and this bal­ance dif­fers from bank to bank. Stop-pay­ment in­struc­tion: If the cus­tomer has lost a cheque leaf or if the en­tire cheque­book gets mis­placed by them, or if they want a par­tic­u­lar cheque to not be hon­oured (re­turned with­out charg­ing to his ac­count when the is­sued cheque is pre­sented for pay­ment to their bank), they need to is­sue a writ­ten/ email in­struc­tion to the bank to that ef­fect. This in­struc­tion will be ac­cepted by the bank only be­fore the cheque is pre­sented to them for pay­ment. The bank levies a charge for this ser­vice. Cheque out­ward re­turn: If the cus­tomer de­posits a cheque given to them (in lieu of ser­vices ren­dered by them) for col­lec­tion and credit to their ac­count, and if the cheque is sub­se­quently re­turned un­paid due to fi­nan­cial in­ad­e­qua­cies such as ‘funds in­suf­fi­cient’ or ‘ex­ceeds ar­range­ment’, they are charged for the ser­vice of col­lec­tion/re­turn at the branch where the cheque was de­posited. As far as this type of ser­vice goes, the charges are to be min­i­mal, as the cheque de­pos­i­tor has no prior clue about the avail­abil­ity/non-avail­abil­ity of funds in the ac­count of the cheque drawer. Banks’ charg­ing huge amounts un­der this head­ing be­comes more a breach of ethics, go­ing against all norms of rea­son­able­ness. Cheque in­ward re­turn: If the cus­tomer is­sues a cheque to third par­ties and this cheque gets re­turned to the pre­sent­ing bank ow­ing to lack of ad­e­quate bal­ance kept in the drawee’s SB ac­count, sig­ni­fy­ing a to­tal lack of fi­nan­cial dis­ci­pline on their part or prob­a­bly a mis­match be­tween their re­ceipts and pay­ments po­si­tion, a charge is levied for the ser­vice of re­turn­ing the in­stru­ment. Ser­vice charges un­der this seg­ment are huge and banks in­vari­ably earn huge rev­enues on this ac­count. Now, though, due to the in­cor­po­ra­tion of Sec­tion 138 un­der In­dian Ne­go­tiable In­stru­ments Act, 1881 (as amended up to date), where dis­hon­our­ing a cheque for lack of funds is a cog­niz­able of­fence invit­ing fines and jail term, in­stances of huge cheque re­turns have been kept un­der check. Elec­tronic clear­ing ser­vice (ECS): ECS is an elec­tronic mode of funds trans­fer from one bank ac­count to another. It can be used by in­sti­tu­tions for mak­ing pay­ments such as dis­tri­bu­tion of div­i­dend in­ter­est, salary and pen­sion, among oth­ers. It can also be used to pay bills and other charges such as for tele­phone, elec­tric­ity and wa­ter, or for mak­ing equated monthly in­stall­ments (EMI) pay­ments on loans as well as pe­ri­odic in­vest­ments in mu­tual funds. These are car­ried out by means of a man­date that au­tho­rizes the in­sti­tu­tion to avail the ECS credit fa­cil­ity; the in­sti­tu­tion can then debit or credit the pay­ments through the bank. ECS can be used for both credit (funds to your ac­count) and debit (funds from your ac­count) pur­poses. The RBI has dereg­u­lated the charges by di­rect­ing banks to af­ford ECS credit/debit free of charge to the ben­e­fi­ciary ac­coun­thold­ers. So this ser­vice is free of any charge. ECS re­turns out­ward: Though ECS is a free fa­cil­ity as far as af­ford­ing credit/debit to/from the SB ac­count is con­cerned, the same is not avail­able when ECS in­stru­ments are re­turned by the pay­ing bank with­out debit to ac­count due to lack of funds in the ac­count. There are charges to be paid for ef­fect­ing re­turns to the pre­sent­ing bank. Ad­di­tion/Dele­tion of ac­coun­tholder: This is a spe­cial­ized ser­vice wherein the bank per­mits your ac­count to be con­verted into a joint ac­count or ex­pand­ing of the ex­ist­ing joint ac­count by in­clu­sion of a third mem­ber as joint ac­coun­tholder or dele­tion of an ex­ist­ing joint ac­coun­tholder. This shall en­tail sub­mis­sion of a form de­vised for this pur­pose which shall also in­clude fresh op­er­a­tional in­struc­tions and re­pay­ment in­struc­tions in the un­for­tu­nate event of death of any of the ac­coun­tholder(s). This ser­vice en­tails one to pay ser­vice charge to the bank.

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