RBI/2004-05/477
CO.DT.No.13.01.298 / H - 9786 / 2004-05
May 20, 2005
Vaisakha 30, 1927(S)
The Chairman / Managing Director
State Bank of India / Associate Banks /
17 Nationalised Banks / UTI Bank Ltd., ICICI
Bank Ltd.,
HDFC Bank Ltd., IDBI Bank Ltd. & SHCIL
Dear Sir,
Committee on Procedures and
Performance Audit on Public Services (CPPAPS) - Report No. 2 - Compensation
structure for delay in payment of interest and / or Principal
Agency banks are already aware
that in terms of instructions issued to them, interest warrants in case of non-cumulative
bonds are required to be despatched one month before the due date. Interest
in respect of cumulative bonds is, however, paid along with the principal at
the time of maturity. The procedure for repayment of principal amount is already
prescribed at paragraph 1.18 of the Memorandum of Procedure and our Circular
CO DT No. 13.01.298 / H-6913 / 2003-04 dated 17.04.2004.
2. Further, in terms of instructions
contained in our letter dated March 24, 2004, the repayment may be made either
by credit to the Savings Bank account of the investor or by issue of Payment
Order. In terms of our letter DGBA DT No. 13.01.298 / H-6252 / 2003-04 dated
April 22, 2004, the maturity value must be sent to the bond holders within five
clear working days on receipt of the duly discharged securities / acquittance
by the office, in case the holders tender the same after the date of maturity
.
3. With a view to providing better
customer service to the investors in Relief / Savings Bonds, it has now been
decided to compensate such investors at the current Savings Bank rate,
on account of financial loss incurred by them due to late receipt / delayed
credit of interest warrants / maturity value of the investments, despite the
existing instructions as enumerated in the foregoing paragraphs.
4. For the purpose of compensating
the investors for delay in receipt of interest warrants / maturity proceeds,
the period of delay needs to be reckoned as under:
I. Delayed receipt of interest
warrants -
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Form of Holding
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Investor's option for receiving
the interest
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Period of Delay
(Actual No. of days)
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(a) Bond Ledger Accounts
(both at Reserve Bank of India and Agency banks /SHCIL)
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(i) By Post.
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In case of delay in receipt
of Interest Warrants by the investors after the Coupon date i.e., after
1 January / February / July / August on account of delay in dispatch of
such interest warrants from the office (one month in advance of the due
date, as per DGBA instructions and to be effected for the half yearly
interest due from July/ August 2005), the period of delay will be reckoned
from 2 January / February / July / August and the actual number of days
excluding the date of receipt will be reckoned for compensation.
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(ii) Credit to bank account
of the investor with the same bank or through ECS.
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In the case of credit of
interest after the Coupon date i.e., after 1 January / February / July
/ August, the period of delay will be reckoned from 2 January / February
/ July / August and the actual number of days excluding the date of credit
will be reckoned for compensation.
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(b)Stock Certificate (only
at RBI)
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(i) By Post
|
In case of delay in receipt
of Interest Warrants by the investors after the Coupon date i.e., after
1 January / February / July / August on account of delay in dispatch of
such warrants from the office (one month in advance of the due date, as
per DGBA instructions and to be effected for the half yearly interest
due from July / August 2005), the period of delay will be calculated from
2 January / February / July / August and the actual number of days excluding
the date of receipt will be reckoned for compensation.
|
|
(ii)Through ECS
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In case of credit of interest
after the Coupon date i.e., after 1 January / February / July / August,
the period of delay will be considered from 2 January / February / July
/ August and the actual number of days excluding the date of credit will
be reckoned for compensation.
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(c) G. P. Notes
(only at RBI)
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The question of delay does
not arise as the post dated interest warrants were issued along with the
G.P.Notes.
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II. For delayed receipt of Maturity
Value / Principal Amount –
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Form of Holding
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Investor's option for receiving
the Principal / Maturity Value
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Period of Delay
(Actual No. of days)
|
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(a) Bond Ledger account (both
at RBI and agency banks / SHCIL)
(b)Stock Certificates / G.P.
Notes (only at RBI offices)
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(i) By Post
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In case of receipt of Payment
Orders by the investors after the date of maturity or after five clear
working days from the date of submission of duly filled in acquittance
to the office of issue due to delay in dispatch of cheque / draft / pay
order, the actual number of days excluding the date of despatch will be
reckoned for compensation.
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(ii) Through ECS
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In case of credit to the
account of the investor after the date of maturity (not counting the 3
days' clearing discipline for ECS payments) or after five clear working
days from the date of submission of duly filled in acquittance to the
office of issue, the actual number of days excluding the date of credit
will be reckoned for compensation.
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5. In case an investor submits
the discharged bond / acquittance much after the due date, the period of delay
will be reckoned only after five clear working days from the date of submission
to the office of the issue.
6. In the case of Bonds where the
investor had opted for cumulative interest payment, if the investor sends the
acquittance by Post and is also desirous of getting any documentary evidence
of the date when the acquittance had reached the branch / office, then he may
be advised to send the acquittance with an 'Acknowledgement Due' card,
at the time when the branch / office advises him about the maturity of the investment.
7. It is also clarified that requests
for reimbursement of the financial compensation for delayed despatch, paid to
the investors by the Agency banks / SHCIL will not be entertained by Reserve
Bank of India.
8. The Agency banks / SHCIL should
also submit a certificate at the time of claiming reimbursement for the interest
and principal amount paid to the investors that the claims do not include any
amount arising out of payment for compensation towards delayed despatch of warrants,
etc.
Yours faithfully,
( B. B. Sangma )
General Manager
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