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sidmis

Can private banks run 'suspense accounts', CIC asks RBI

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sidmis

Can private banks run 'suspense accounts', CIC asks RBI

AS appeard in India News section of TwoCirclesNet on 14 July 2009

 

New Delhi, July 14 (IANS) If a cheque has a spelling mistake in the recipient's name, can the bank put the money in a temporary account? The Central Information Commission (CIC) has asked the Reserve Bank of India (RBI) to clarify on this practice.

 

The decision last week came on a Right to Information application filed by Delhi-based RTI activist Subhash Chandra Agrawal with the finance ministry last year.

 

Agrawal told IANS: "One of my unconfirmed sources had told me that in Delhi alone ICICI Bank has nearly Rs.100 crore lying in suspense accounts. So I feel, the RTI Act should also apply to those private sector establishments where public interest is concerned and such malpractices are taking place."

 

Agrawal had asked the ministry if it was aware that ICICI Bank, India's leading private bank, was following the practice of crediting the proceeds of many clearing instruments like cheques and demand drafts, bearing insufficient details about the account holders to a 'suspense account'.

He had also asked if the government was going to take any steps to prevent this practice.

 

Not satisfied with the reply he received from the central bank. Agrawal approached the CIC.

 

"We feel that the RBI must write to the appellant again and give a comprehensive reply stating categorically if the RBI had ever issued any instruction on the subject and if, according to the available information with them, such practice is being followed in other banks including public sector banks," Information Commissioner Satyananda Mishra of CIC observed in his order.

 

Agrawal has indeed brought "a very important matter to the notice of the authorities through his application which deserves to be taken into account by the RBI for appropriate action. We strongly recommend that this matter should receive attention of the authorities in the RBI", Mishra noted

 

Can private banks run 'suspense accounts', CIC asks RBI | TwoCircles.net

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sidmis

A similar article also appeared here in INDOPIA.

Disclose instructions on unclaimed cheques, CIC tells RBI

Published: July 14,2009

 

New Delhi, Jul 14 The CIC has directed RBI to clarify if it has issued any instruction regarding a private bank&aposs alleged practice to credit amounts of clearing instruments, like cheques and drafts, having insufficient details of account holders to a suspense account.

 

". Give a comprehensive reply stating categorically if the RBI had ever issued any instruction on the subject and if, according to available information with them, such practice is being followed in other banks including public sector banks," Information Commissioner Satyananda Mishra said.

 

Mishra was hearing the plea of Subhash Chandra Agrawal who earlier filed an RTI application with the Ministry of Finance to know if it was aware of the practice by ICICI bank.

 

Agrawal while speaking to PTI said,".The amount of cheques having insufficient details of customers is often transferred to suspense accounts. The person has to run around to claim it. My RTI was about the practice followed in ICICI and a directive, if any, on the subject."

Not satisfied by the reply ministry, Agrawal filed second appeal with the Commission on the issue.

 

Directing RBI to supply information by July 18, Mishra said,"The appellant has indeed brought a very important matter to the notice of authorities through his application for information which deserves to be taken into account by the RBI for appropriate action. We strongly recommend that this matter should receive attention of the authorities in the RBI.

 

Source: PTI

 

http://www.indopia.in/India-usa-uk-news/latest-news/623051/National/1/20/1

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Pulivarthi Narasimhulu

Please provide the latest information on the subject i.e., whether the RBI responded CIC's request or not. If clarified by RBI, the contents of the clarification.

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mahir

It is a general practice of public sector as well as private sector Banks to credit proceeds of such instruments deposited by public with insufficiant or wrong particulars of the a/c ,or name of the a/c holder differs, in their nominal a/cs may be called as Suspense a/c or Sundry Creditors, because when a depositor comes to know that the amount has not been credited to his a/c He can approach the Bank in question and get the mismatched information rectified by showing proof of deposit of the instrument with insufficiant or incomplete detail. Otherwise what to do with that amount which Bank gets after getting an credit of aninstrument in clearing.

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