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Banking > Basics > Collection Business


Collection Business

Apart from transferring money from one place to another, Banks are also in the business of "collecting" your money from other places. For instance, if you have received a payment by way of a cheque or DD drawn or payable at any station other than your own, you can deposit it in your account with your local banker and request for collection of the amount. The Bank will send the cheque to its branch at that centre and get the amount collected for a small fee. The amount of cheque/ draft will be deposited in your account and the fee deducted separately from your account. Banks also undertake collection of bills of exchange - both usance and demand - for their business clientele. 

Tips:

  1. There are RBI norms for the time expected to be taken for collection business and these norms are prominently displayed in banking hall of all banks. If your collection is delayed beyond this period, the Bank is expected to pay interest on the amount. If it does not, demand it.
  2. Retain the counter foil of all deposits made in the bank as this is the only proof of deposit made till your account is credited
  3. If your business involves a number of such payments, it is advisable to open an account with a Bank which has a large network of Branches.
  4. Charges for each of these activities differ from bank to bank. While selecting a bank for opening an account, these charges are an improtant parameter which one should keep in mind.

 

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