Publications

Minimum number of cheques to be tendered by an applicant for full membership

Withdrawal of member from participating in the Clearing House

Consequences of cessation of membership of sponsor member

Mode of subscription to Clearing House Regulations and Rules

Hours of clearing and return of documents to be incorporated by the Clearing House.

The objects of the Clearing House are :

(a) To make arrangements for the speedy and economic collection of cheques, bills and other documents payable or deliverable at or through offices of the members and sub-members of the House situated in the city/town of by a system or systems of clearing (hereinafter referred to as "Clearing") with power to apply or to extend any system or systems to any place in the environs of ___________________________ and from time to time abandon, re-constitute or alter any system or systems.

(b) To make arrangements, and to frame rules relating to the collection or non-collection or documents between members and sub-members of the Clearing House.

(c ) To maintain records of the Clearing House and of such other matters as may be thought fit.

(d) To draw up and prescribe from time to time forms for the use of the members and sub-members of the House in connection with the clearing.

(e) To do all such other lawful things as are incidental or conducive to the attainment of all or any of the foregoing objects.

1. The Manager, ___________________ (insert the name of the bank managing the Clearing House) shall be the ex-officio President of the _______________ (insert the name of the centre) Bankers Clearing House. The President shall be the ultimate authority in managing the Clearing House.

NOTE : Wherever Reserve Bank of India (RBI) is willing to undertake the management of the Clearing House, or the State Bank of India (SBI) or one of its associates (as may be specified by the SBI) in the event of RBI not undertaking the management, and in the absence of either, one of the public sector banks in that centre, which may be specified by the RBI, shall be the bank managing the Clearing House.

(b) The President may, in the event of a temporary absence from duty, nominate another officer of his bank to act for him, and failing such nomination, the officer of the bank managing the Clearing House who is currently looking after the duties of the manager of the bank managing the Clearing House shall act as the President of the Clearing House during the period of such absence of the President.

(c) The President will be assisted by a Standing Committee, constituted at a meeting of the members, in resolving the problems /issue /situations requiring urgent solutions.

(d) The Standing Committee shall consist of not less than 5, but not more than 7 members, including the President, and will comprise of :-

1. the bank managing the Clearing House,
2. Reserve Bank of India wherever it is not managing the Clearing House and where it has its Banking Department,
3. State Bank of India or any of its associate banks as may be specified by State Bank of India wherever they are not managing the Clearing House,
4. two other public sector banks where the Clearing House is managed by a bank other than Reserve Bank of India or State Bank of India or its associates, and in other cases three other public sector banks, as may be specified by the bank managing the Clearing House, and
5. two other banks specified by the bank managing the Clearing House, from out of remaining members of the Clearing House.

The term of office of the member of the Standing Committee coming under categories (iv) and (v), shall be two years. The concerned member should nominate its representative, who will be participating in the meetings on behalf of the said member.

The membership of a Clearing House shall comprise of the initial members as enumerated in the Rules of each Clearing House and such other members as may be admitted by the Clearing House from time to time in terms of the provisions made in Regulation 8.

For the purpose of speedy and efficient service to customers, a member bank may be represented in the House by more than one designated branch depending upon the number of its branches in the area of operation of the Clearing House and the number of instruments handled. The allotment of additional seats will not confer any additional voting right to the bank concerned.

(ii) All applications for membership, from all categories of banks, shall be scrutinised by the President of the Clearing House to confirm among other things that the applicant has

• a valid banking license issued by the Reserve Bank of India;
• opened a current account in the relevant bank for settlement of the clearing amount;
• insured its deposit liabilities with the Deposit Insurance & Credit Guarantee Corporation (DICGC).

1. Public sector commercial banks, private sector commercial banks incorporated after January 1994 and foreign banks shall be admitted by the President after scrutiny as per Sub-Regulation (a) (ii) above. Post Office Savings Banks shall also be admitted as members subject to compliance with Regulations 4 and 9.
2. Application received from banks other than those covered under Sub-Regulation (b) above shall be referred by the President along with his comments to Reserve Bank of India for its recommendations. On receipt of Reserve Bank of India’s recommendations on any application, the President shall recommend such proposal accordingly to the General Body for decision in line with such recommendations.
3. The President shall promptly advise all the members about the names of new members and shall determine the date from which the new members shall participate in the clearing operations

Each Clearing House shall stipulate in its rules the average minimum number of clearing cheques to be tendered by the applicant for being eligible for membership. This stipulation, however, will not apply to commercial banks in the public sector and to such Post Office Savings Banks with reference to which a competent authority from Posts and Telegraphs Department has requested for the waiver of this requirement.

If any member bank has not complied with the requirement prescribed, its membership shall be kept under review on a six monthly basis, to see if desired minimum presentation has been reached. Otherwise, membership need be terminated.

For the purpose of this regulation, the expression "the average minimum number of clearing cheques" shall be determined by the average of the instruments tendered for clearing by any bank in the course of a year, or such lesser period as the Clearing House may specify in this regard.

9A.

Each clearing house shall stipulate in its Rules the maximum value of the documents that could be presented for clearing by commercial banks in the private sector and the central co-operative banks and primary co-operative banks. The maximum value shall be determined with reference to their deposit liabilities.

Relaxation of the limits may be allowed by the Manager of the Clearing House if circumstances warrant

10.

A member shall cease to be a member in any of the following events, namely :-

(a) If it is granted moratorium or prohibited from accepting fresh deposits.

(b) If it shall stop or suspend payment of its debts generally or cease to carry on business, or go into liquidation either voluntary or compulsory.

(c) If a resolution of expulsion be passed by the vote of a majority of not less than three-fourths of the members on the roll/authorised representatives present at an Extra-ordinary General Meeting specifically convened for the purpose at which not less than three-fourths of the members on the roll of members shall be represented, after hearing the explanation of the member bank. Such resolution shall state the reasons and specify the period for such expulsion. Provided always that not less than 14 clear days notice of such Extra-ordinary General Meeting shall be given and a special notice in writing that a resolution to expel the member will be brought before the Meeting shall be sent to such member by the President not less than 14 clear days' before the date fixed for the Meeting.

Provided further that before any resolution for expulsion is given effect to, Reserve Bank of India should be advised in writing by the President about the reasons for such expulsion and a copy of the said communication shall also be endorsed by him to the Central Office of the bank managing the Clearing House and the bank proposed to be expelled at that centre.

Provided further that it shall be open to Reserve Bank of India to annul or rescind such resolution for expulsion or to defer or limit its implementation for such time as Reserve Bank of India may specify.

(d) If it fails to meet its clearing liability.

(a) Refusal by the representative of a member bank to accept or exchange the instruments of another member or refusal to deal with another representative in the Clearing House shall be construed as withdrawal by the concerned member bank from the Clearing House for that day and the position will be reviewed thereafter. The President shall report such incident to the member bank(s) concerned and such member bank(s) will initiate appropriate disciplinary action against the representative/s for his/her/their misconduct promptly and will report to the President the action taken against the representative/s.

(b) A member bank shall also be deemed to have withdrawn from the Clearing House on receipt of a report from the President of the Clearing House that the representative(s) of the bank(s) has/have indulged in any of the following misconducts :-

(1) disrupting the normal functioning of the clearing by resorting to tactics intended to delay and/or defeat the smooth functioning of the Clearing House;

(2) refusing to obey the lawful and reasonable orders of the Supervisor or President of the Clearing House;

3. Resorting to any unfair practice, such as

1. insisting on a treat to be given by a representative of a bank on the admission of the bank as a new member or change of representative by an existing member.
2. ragging of any representative attending to the
Clearing House.

(4) Any other conduct which may be considered unbecoming by the President. The withdrawal by such bank from the Clearing House shall be for such minimum period as the President may indicate having regard to the Circumstances of the case.Provided, however, this period may be altered or otherwise limited by Reserve Bank of India, and during the period of such withdrawal the bank concerned shall take quick remedial steps including changing of its representative(s) to ensure its effective participation and the smooth functioning of the Clearing House.

(c ) If any representative(s) of a member bank commit(s) any act which results in the member bank withdrawing from the clearing as mentioned above, the member banks shall initiate appropriate disciplinary action against such representative(s) under the terms and conditions of service governing him/her/them.

A sub-member shall cease to be sub-member in any of the following events, namely :-

(a) a sub-member will cease to be a sub-member on his admission as a (full-fledged) member.

(b) if it is granted moratorium or prohibited from accepting afresh deposits.

(c) if it shall stop or suspend payment of its debts generally or cease to carry on business, or go into liquidation either voluntary or compulsory.

(d) if a resolution of expulsion be passed by the vote of a majority of not less than three-fourths of the authorised representatives of members present at an Extra-Ordinary General Meeting specially convened for the purpose at which not less than three-fourths of the members on the roll of members shall be represented after hearing the explanation of the member bank. Such resolution shall state the reasons and specify the period for such expulsion.

Provided always that not less than 14 clear days notice of such meeting shall be given and a special notice in writing that a resolution to expel the sub-member will be brought before the meeting shall be sent to the sponsor member of such sub-member by the President not less than 14 clear days' before the date fixed for the meeting.

Provided further that before any resolution for expulsion is given effect to, Reserve Bank of India should be advised in writing by the President about the reasons for such expulsion and a copy of the said communication shall also be endorsed by him to the central office of the bank managing the Clearing House and the bank proposed to be expelled at that centre. Provided further that it shall be open to Reserve Bank of India to annul or rescind such resolution for expulsion or to defer or limit its implementation for such time as Reserve Bank of India may specify.

(e) if the sponsor member has given a notice of termination of clearing arrangement on behalf of the sub-member subject to the provision of Regulation 17 below -

The maintenance charges of the Clearing House as determined by the bank conducting the Clearing House on rent for accommodation, depreciation on equipment and furniture, and recurring establishment expenses including salaries paid to the staff of the bank managing the Clearing House calculated on a proportionate basis for a the period for which their services are utilised for the clearing house operations, and overtime allowance paid to such staff for the purpose of balancing the books/reconciling the differences in the Clearing House, telephones, electricity, stationery, maintenance charges for equipment and expenses towards any other facilities provided, shall be shared equally by all the members and the amount to be recovered will be debited quarterly/monthly to their current accounts maintained with the bank managing the Clearing House.

(a) Meetings of members of the Clearing House may be convened by the President as and when he considers it necessary or on receipt of a requisition signed by not less than five members, or not less than one third of the total members, whichever is less, specifying the object of the meeting. No business shall be transacted at any meeting of the members except at an emergent meeting unless a quorum of two-thirds of the whole of the members on the roll be present at the commencement of such business. In the case of an emergent meeting called by the President to meet an abnormal situation such as staff agitation affecting member banks, dislocation of traffic, riots, civil commotion etc., the members attending the meeting within five minutes of the scheduled time shall form a quorum.

(b) Save as otherwise provided in these Regulations, at all meetings, whether ordinary or emergent, all matters submitted to the meeting shall be decided by a majority comprising not less than two-thirds of the members present.

(c) Every member shall have one vote by its authorised representative; a sub-member shall not have any vote or voice in the management of the House.

(d) If at any meeting convened by the President no quorum is present, then the meeting shall stand adjourned either to a subsequent place or at the same place at any time later, on the same date, or at any later date, as may be decided by the President, having regard to the circumstances of the case, and for any such adjourned meeting, there shall be no quorum required and it shall also not be necessary for the President to give any separate notice thereof.

A sponsor member shall be responsible for communicating to the sub-member sponsored by such sponsor member, where necessary all notifications, circulars, etc. issued by the President. A sponsor member shall be furnished with an extra copy of the said documents for the use of its sub-member.

Minutes of the proceedings of all meetings, as also the decisions taken as a result of proceedings by circulation shall be recorded in a minutes book and shall be made available to members by the President at his office on request.

A clearing house may be closed for the following reasons:

1. An Extraordinary General Body Meeting of all the members of the said clearing house may be convened after giving notice of not less than 14 clear days and the resolution of closure should be passed by the vote of a majority of not less than three-fourths of the members on the roll of that clearing house.
2. The Clearing House should thereafter make a request for closure to the Regional Office of the Department of Banking Operations and Development (DBOD), Reserve Bank of India, in the State where the clearing house is located / under whose jurisdiction the clearing house is located alongwith a copy of the Resolution passed.
3. The closure may be effected after receiving the approval of the Regional Office of DBOD.
4. One month's notice will be given to the members before effecting the closure of the said clearing house.
5. The public in the jurisdiction of the clearing house will be duly informed through the local newspapers regarding the impending closur

(a) The clearing shall be conducted normally at a place provided by the bank conducting Clearing House.

(b) In the event of there being a dislocation of work in the bank conducting the Clearing House and the President being of opinion that, as a result of such dislocation, it is impossible for his bank to conduct the clearing house operations, or that it is desirable that the same is taken over by some other member bank, the conduct of the clearing house operations shall be taken over by such other public sector bank as may be decided upon by the President of the Clearing House. Such bank shall remain in charge of the conduct of the clearing house operations till such time as the President decides that his bank is able to take charge of the same. Provided, however, that in cases where this sub-rule is invoked, a report shall be sent immediately by the President of the Clearing House to Reserve Bank of India and to the central office of the bank managing the Clearing House, explaining the circumstances which warranted action being taken in terms of this sub-rule.

(c) It is understood and accepted by all members of the Clearing House that the bank conducting Clearing House in the conduct and settlement of the clearing shall incur no other liability or responsibility than that falling upon other member banks.

(a) There will be one clearing on each business day divided into two deliveries at and except on Saturdays' when there will be only one delivery at

or

(a) The Clearing shall be held on week days' and on Saturdays' at

(b) In the first delivery as many cheques and documents as possible will be delivered and the amount of cheques and documents so delivered will be included in the clearing total for settlement and the cheques and documents will be treated as part of the day's clearing. Dividend Warrants and telegraphic transfer receipts shall not be presented in the second delivery.

* (c ) A Return clearing shall be held at (and at on Saturdays') ** for cheques presented in the clearing and which are returned unpaid under objection. (if there is no provision for return clearing on Saturdays, the cheques presented in the clearing on Saturdays, if unpaid, will be returned through the clearing on the next working day but they should be listed separately.)

or

* (c ) A return clearing shall be held at a.m./p.m. on week days' for cheques on branches which are returned unpaid under objection. Unpaid instruments drawn on branches in the town area and also those presented through the clearing on Saturdays' will be returned on the following working day along with first delivery, but listed separately.

or

* (c ) The following schedule will be followed for exchange of instruments returned unpaid :-

a) Presented though 1^st clearing - returnable in the next day’s 1^st clearing.
b) Presented through 2^nd clearing – returnable in he next day’s 1^st clearing.

1. Presented through 1^st clearing – returnable in the next day’s 1^st clearing.

* To delete whichever is not applicable.

** This will apply to centres where there will be return clearing on Saturdays.

1. Presented through 2^nd clearing – returnable in the next day’s 2^nd clearing.

3. Instruments drawn on suburban branches

a) Presented through 1^st clearing – returnable in the next day’s 2^nd clearing.

b) Presented through 1^st clearing – returnable in the next day’s 2^nd clearing.

The branches of banks comprised in the city area, the town area and the suburban area, as the case may be shall be specified from time to time by the President of the Clearing House and advised to all the members/sub-members.

1. instruments which have to be returned under
objection for a reason such as "Clearing Stamp required" shall be sent direct to the bank which presented them in the Clearing House and not through the clearing.

(ii) Debit notices received in exchange for instruments presented on the counter (not through clearing) to the paying bank (during or after clearing hours) are not acceptable in the return clearing for return of instruments and must be so marked when issued.

The maximum value of the documents that could be presented for clearing by private sector commercial banks and the central co-operative banks and primary co-operative banks shall be 10% of their deposit liabilities. The limits shall be fixed for each year on the basis of the deposit liabilities of the previous year.

(a) Documents payable at all the offices of a member bank within the clearing area shall be listed in a delivery slip also showing the total of all such documents and the amounts covered thereby.

(b) Documents payable at all offices of a sub-member duly listed in one delivery slip shall be delivered in the Clearing House direct to the sponsor member of the sub-member concerned by the representatives of the member banks.

(a) Where there is a separate clearing for settling returns, the clearing and the separate clearing of returned documents shall be settled separately by passing entries through the banking accounts which the member banks maintain with the bank managing the Clearing House. Clearing balance against members shall be debited and clearing balances in favour of members shall be credited to their accounts with that bank.

(b) Member banks having favourable clearing balances may be permitted to draw thereagainst on the same day subject to the following conditions :-

1. Interval between the hour when the clearing is
struck and the bank’s (viz. which conducts and supervises the ‘House’) closing hour (business hours) should be longer than one hour to permitcredits being afforded to member banks after Settlement.

Where there is same day special clearing for return of unpaid cheques which is also accounted on the same day, reference to the ‘hour’ when the clearing is struck will apply to such special clearing.

(c) Whenever ‘payable’ differences are located, payment must be made to the respective bank without waiting for a claim from them. The format of the ‘debit note’ to be used in this connection is given in Annexure ‘E’

In case of ‘receivable’ differences, concerned member bank should take up the matter with the respective banks immediately, by furnishing full particulars such as cheque No., branch office of the presenting bank to which it relates, nature of the instrument such as current account, savings bank, government cheque, draft, dividend warrant etc. Member banks should pay off the claim as early as possible, but in no case later than one week from the date on which the claim has been received. If settlement is not made within 7 days', interest should also be paid at the rate applicable to clean overdraft plus 2%.

(d) To avoid possible embarrassment to members of the Clearing House, member banks who have received advice by telegraphic transfer to receive an amount from another member bank shall either obtain a cheque or ascertain from the paying bank that payment will be duly made before trying to recover the amount from the paying bank through the Clearing House.

(e) Every member shall keep with the bank managing the Clearing House a minimum balance of Rs. . . . . . . . . . . . . . . (to be decided by each Clearing House) at the close of business each day. This requirement shall not be applicable in the case of Post Office Savings Bank, provided the Department of Posts gives an authority to the bank managing the Clearing House to raise a debit to the Central Government Account maintained with it, irrespective of the amount involved, whenever there is an adverse clearing position against the Post Office Savings Bank.

NOTE : The minimum balance to be decided by Clearing House shall, however, not be less than

Rs. 25,000/-.

(g) In case any member bank fails to maintain the minimum balance as required in Rule 10 (e) and/or Rule 10 (f), such defaulting member shall be liable to pay penal interest at the rate of 2% above the prevailing Bank Rate on the amount representing the shortfall in the stipulated minimum balance from the following working day till the minimum balance position is regularised. Further, if the default results in an overdraft on account of adverse clearing position, such defaulting member shall be liable to pay penal interest at the rate twice the prevailing Bank Rate on the amount representing the overdrawal for the period from the date of overdrawal till the debit position is regularised.

(a) Each member bank shall be represented in the Clearing House by its authorised official/s as representative/s who shall deliver and receive the documents to be cleared. Such representative/s may be assisted by one more person, when required. Each representative, in addition to his identity card which shall be issued to him by his bank, should always have in his possession, whenever he is attending the Clearing House on behalf of his bank, the Clearing House entry card of member bank which shall be issued to his bank by the bank managing the Clearing House. Whenever and wherever the circumstances so warrant, it would be open to the member bank(s) to depute at any time any other representative who may be an officer or a member of clerical staff of the bank to the Clearing House for delivering / receiving documents to be cleared.

1. Such representative shall –

1. abide by the Regulations and Rules of the Clearing House.
2. represent his/her bank in the House.
3. refrain from any activity that may bring discredit to his/her bank or disrupt the clearing.
4. conduct himself/herself with dignity in the House and respect and obey the Supervisor and the President of the Clearing House.

(c) The representatives of member banks shall be changed once in six months, and earlier if so required by the President, for any reason whatsoever. It should be further ensured that under no circumstances, the same individual gets his turn for a second time in the same year.

(d) Member banks shall take full responsibility for the action of their own representatives. Members must send their representatives to the Clearing House during clearing hours whether the member has any documents to pass through the clearing or not. The doors of the Clearing House will be closed after the scheduled timings of each delivery as indicated in Rule 2 (a), and the return clearing in Rule 2 (c) read with Rule 3.

Should any clearing representative be late, his documents shall not be accepted for the particular clearing but he shall remain in the Clearing House to receive all documents drawn on his bank. The President may at his discretion consider, on the merits of each case, allowing the representative (s) coming late, to take part in the clearing.

(e) Clearing House being jointly organised for common good of all members, the member banks’ representatives will help in expediting balancing of Clearing House. It shall not be permissible for any member bank’s representative to leave the Clearing House except with the permission of the supervisor until all balances have been compared and agreed and the final balance has been struck by the supervisor of the Clearing House. But the assistant may leave the Clearing House with the permission of the supervisor. Facilities consistent with expeditious and smooth conduct of clearing process shall be permitted by the supervisor to the extent possible.

(f) Once the representative of a member bank has entered the Clearing House, he has to participate in the clearing. It shall not be permissible for the representatives of any member bank to refuse to deal with the representatives of other member banks for any reason whatsoever.

(g) When a member bank is not in a position to participate in any clearing meeting for whatever reason, it should intimate so, to the President at the earliest possible time. Wherever possible, the President shall circulate this information to all the members well in advance.

(a) Each member or a branch where multiple membership is allowed to such branch must provide for the use of its representatives attending the Clearing House a register suitably ruled in which shall be entered a record of the documents received and delivered by him in the Clearing House. After entering in his register the documents to be cleared by him, the representative of the clearing member shall hand over to the representative of the drawee member or branch clearing separately the documents deliverable to him together with a delivery slip and the representative of the drawee member or branch clearing separately shall in turn enter the total in his register. After comparing the delivery slips with the documents received and verifying the totals, each representative shall total the receipts and deliveries in his register, strike a balance therein showing the net amount due to or by his bank and hand over a signed copy of the settlement sheet to the supervisor of the Clearing House who shall then strike the gross balance of the whole.

All cheques and other documents passed through the clearing shall bear a Clearing House stamp affixed by the collecting member bank with its name and the name of the branch presenting the documents and indicating the date of clearing and delivery through which these are passed.

The members agree that the Clearing House stamp of a member affixed on a document shall denote and mean –

1. When the documents is drawn payable to the member or to a sub-member sponsored by such member, on account of a person named, e.g. ABC bank A/c XYZ, a discharge by endorsement by such member, or as the case may be, by such sub-member, and a certificate by it to the effect that the document has been or will be credited to the account of such person.
2. In the case of any other document payable to or endorsed in favour of a member or such sub-member, a discharge by endorsement by such member, or as the case may be, by such sub-member.
3. In the case of a document requiring a certificate or other endorsement in one or other of the forms referred to in Annexure ‘F’ to these Rules or in a form similar thereto, the members/sub-members agree to accept the Clearing House Stamp of a member/sub member in lieu of discharge by such endorsement or such certificate, and further agree to endorse or cause to be endorsed, any such document, or give, or cause to be given, such certificate at any time they may be called upon to do so by the member or the sub-member who paid it or on whom it is drawn.

The minimum number of clearing cheques to be tendered by an applicant for membership shall be _____________________*. This stipulation, however, will not apply to the bank conducting the clearing house, commercial banks in the public sector and to such Post Office Savings Banks with reference to which the Department of Posts through a competent authority has requested for the waiver of this requirement.

The following banks are at present the members and sub-members of the Clearing House:-
1. _______________________________________________________________________
2. _______________________________________________________________________
3. _______________________________________________________________________
4. _______________________________________________________________________
5. _______________________________________________________________________

Date of difference ___________________

Outward Clearing Voucher No. __________________________________

Paid to _____________________________________________________

A/c.: ______________________________________________________

Rs. ________________________________________________________

Initials

Valid for 3 months OUTWARD-CLEARING code No. ____

DATE :____

Clearing Voucher No. Name of the Place ____________
Name of the Bank ______________________________
Name of the Branch _____________________________
The sum of Rupees _____________________________
______________________________________________
is payable to __________________________________
_____________________________________________
on account of difference in our outward clearing.
of _____________________as per reverse.|
Rs. ___________ Accountant Accountant.