Committee on Procedures and Performance Audit on Public Services (CPPAPS) - Report No. 2 - Compensation structure for delay in payment of interest and / or Principal - RBI - Reserve Bank of India
Committee on Procedures and Performance Audit on Public Services (CPPAPS) - Report No. 2 - Compensation structure for delay in payment of interest and / or Principal
RBI/2004-05/477 May 20, 2005
The Chairman / Managing Director 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 -
II. For delayed receipt of Maturity Value / Principal Amount –
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 ) |