Book of instructions

instruction regarding books

1. Updated up to 31.07.2011 I&AD BOI/CH.X Page 1 of 23


Annexure – I
(IAD Cir. No. 53/2011 dated 14.10.2011)

CHAPTER – X

DEMAND DRAFTS AND CASH ORDERS


1. In Core Banking Solution (CBS), the amount of FINACLE draft (draft drawn by a CBS SOL on other CBS SOL) is not reflected in HO Extract, as the amount is not transferred to HO account. These drafts are paid online by debiting Decentralized Draft Payable A/c and the transaction get
reconciled through the inter sol reconciliation mechanism.

2. ‘Draft Security Forms’ are printed & supplied in ‘Continuous Stationary Format’ by Printing
& Stationary Department in a ‘Set of Two’ format, i.e. (a) Draft Form and (b) office copy. The
security form for ‘Draft’ is also used for issuing Cash Order.

3. Cash Order will be issued by;

(i) Branch located at a station where only one branch of our bank is functioning,

(ii) Branch, which is designated as drawee branch at a non-RPC / CDPC station, on which
draft may be issued by other branches.

3.1 Accordingly, for local remittances, the rule shall be as under:

Branches functioning at CDPC/RCC centers.


Branches will issue drafts drawn on CDPC / RCC.

Branches functioning at Non - CDPC/RCC centers but having Service / Designated branch on
which branches may issue drafts

a) Local branches will issue drafts on service / designated branch.

b) Service / Designated branch will issue cash order on the draft security form.

Branches functioning at Other centers having 2 or more branches

Branches, at centers where neither CDPC/RCC nor any service / designated branch is located but having two or more branches, will issue demand draft on any of the other local branch for
local remittances.

Branches functioning at Centre where only one branch is situated


Branch will issue cash orders, on draft security form.
3.2 System will print the words “Cash Order & Not Transferable” in a box on top middle of the
draft form, words “or order” will be deleted and the word “only” will be added after the name of
payee, to make the text features exactly same as of existing cash order. It must be ensured that
changes so made by System shall not be modified manually.

3.3 For Branches, other than at (3) above, the use of cash order security form as well as the
related accounting head has been discontinued for issuance of fresh cash orders w.e.f.

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01.08.2007. However, the cash order a/c <sol id>3161101 will continue to be used by the
branches for payment of outstanding cash orders, already issued, till such time the outstanding
cash orders are paid by the issuing branch. After payment of all cash orders and reducing of the
cash order balance to ‘zero’, the concerned branch will send request to data center through its
respective Zonal Help Desk, for closure of cash order account.

3.4 Where cash order is issued (branches as per (3) above), its accounting in the books of
Cash Order issuing branch would take place under the head ‘Cash Order’.

3.5 Cash orders / draft issued, as per above, for some specific purpose say for example, in
loan disbursements, in discharge of Bank’s obligations, etc., where it is intended to pay the
amount of the draft to the payee only, will be crossed “Account Payee Only’ to avoid its further
transferability. Though the Negotiable Instrument Act does not recognize ‘Account Payee Only’
crossing, the Reserve Bank of India, vide circular no. CBOD.BP.BC No. 56/21.01.001/2005-06
dated 23.01.2006 has directed the banks to credit the proceeds of an instrument with “Account
Payee Only’ crossing to the payee’s account only, thus restricting the transferability of the
instrument.

ACCOUNTING SYSTEM

4. Localized DD A/c (draft payable a/c)
: The account is maintained at each service outlet/CBS
branch for non-FINACLE Drafts (Draft issued by a FINACLE / non-FINACLE branch on non-
FINACLE / FINACLE Branch, respectively). The outstanding draft payable (Draft advice received
but draft is pending for payment) and Draft Imprest entries (Draft paid pending receipt of related
advice) are carried over to this account when a Non-CBS branch is migrated.

4.1 The activities relating to payment / cancellation / loss of Non-FINACLE draft are performed
by the drawee branch through this account. Other service outlets in finacle cannot access this
account.

4.2 As all our branches are now migrated to CBS, System does not allow issue of fresh
demand draft through this account.

4.3 Non-FINACLE Draft related transactions would continue to be routed through the head
office account and reconciled through the IBR mechanism.

5. Decentralized draft Payable account
(DD Account): In each branch Decentralized draft
Payable account (DD Account) is maintained. Issuance / Payment cancellation of FINACLE drafts
is done by a branch by crediting / debiting the decentralized DD account maintained in its books of
accounts. A service outlet cannot access this a/c in the book of other branch through ISO
Mechanism.

5.1 A User cannot issue a draft by crediting localized demand draft account

6. Centralized Draft Payable Parking a/c:
The draft related transactions between two
branches get reconciled through the inter-sol mechanism and do not require reconciliation through
IBR mechanism, hence would not be reported in daily HO extracts of individual service outlet.

6.1 A Centralized Draft Payable Parking a/c No.2107003171200 has been opened at CDPC,
New Delhi. During the day, Branches would issue / pay draft to the debit / credit to their respective

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Decentralized draft Payable account. At the time of Day-end of the Paying Branch, System would
credit the Draft Payable Account of the Paying Branch and debit the Centralized Draft Payable
Account (210700 3171200).

Inter Sol Account (ISO)

7. When ever there is a inter branch (Cash / Clearing / Transfer) transaction between two
branches, inter-sol account is affected. Inter-Sol Account (no.3211203) is used for balancing the
inter-sol transactions. This a/c may have debit or credit balance outstanding at any point of time
depending upon whether the amount of transaction initiated by the user’s service outlet on other
finacle service outlets is more or lesser than the amount of transactions initiated by other service
outlets on the user’s service outlet. This is a ‘System Account’, which means that only system can
put any transaction to this account. User cannot directly debit or credit this account

8. The inter sol account shall be shown separately in the ‘Statement of Assets and Liability’
(weekly statement of affairs), below the head - Balance with HO on both the sides of the weekly.

9. At the end of the day, the books of originating / destination branches shall show a credit/
debit entry without any corresponding debit/ credit entry. The individual daybooks of both the
branches would not tally though their individual end of day (SOLEOD) process would go through.

10. At the time of CENTRAL END OF DAY (CEOD) done at Data Centre, the system
reconciles all the inter sol transactions initiated by different service outlets during the day. The
sum of GL balance of inter-sol account of all service outlets in finacle database shall get
reconciled and reduced to Zero at CEOD.

ISSUE OF A DRAFT

11. Drafts issuing branches have the primary responsibility in ensuring that the drafts issued by
them are complete in all respects and all guidelines are fully complied with. The drafts should be
issued on specified stationery, the GBPA holders should sign on the drafts in the same manner as
given in the specimen, the GBPA number must be clearly / legibly written ( a rubber stamp may be
got prepared for the purpose), draft be punched correctly. Drafts should be issued free from
alterations and cuttings. In case of draft for an amount of Rs.25,000/- and above, it would be
issued under the signature of two officials.

11.1 The branches should ensure that all supervisory staff members are issued GBPA / Specific
Power of Attorney (to the officiating workman staff on merits). Proposal for issuance of the same
be submitted to Personnel Administration Division, HO, through Circle Office.

12. An application, for issuing a Draft / Cash Order will be taken on prescribed Form (PNB-1),
in which full name and address of the applicant will be recorded and would be signed by the
applicant. The Application so received would be used as a credit voucher.

13. The Application Form also contains authority to debit the customer’s account. In such
situation, the Application Form must be signed by the person/s authorized to operate the account.
The signatures should match with the Specimen Signatures on record. In such cases, a cheque
drawn in favour of the bank, is unnecessary and should not be asked for, when not tendered with
the application. The Application shall be treated as Credit Voucher and for debiting the account,
Debit transfer voucher shall be prepared, with remarks that authority to debit the account given in

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the Application Form.

14. Tendering of a cheque, in favour of the bank, is in itself no authority to make a remittance
to the debit of the drawer's account. Accordingly, making of an application for issue of draft is
mandatory, though it may contain authority to debit the account or it may be accompanied with a
cheque drawn in the account.

15. Request for issue of draft may also be made through a letter of authority to debit the
account. In these cases, the date of the authority letter will be entered on the application form,
which will be filled up under the authentication of a checking official, the letter being made an
enclosure to the debit voucher.

16. The signatures and particulars on the Application Form containing authority to debit the
account or Letter of Authority must be very carefully examined and verified under the signatures of
authorized officer.
17. Particulars of draft, which are issued to the debit of customer's accounts and handed over
or remitted to third parties, must immediately be advised on form No.PNB-5 to the customers
directly and not through their messengers (to whom ordinary memos should be given, if required).
If the draft is to be delivered to a person specified in the application, it should be delivered on
proper identification and against acknowledgement on the authority itself.

18. Ordinarily, drawings by drafts should be restricted to the Drawing Limit fixed for the Drawee
Branch and such limits are, in no circumstances, to be exceeded in respect of drawings on small
offices. (Branches can contact their respective Circle Offices for fixing / re-fixing their drawing
limit) If in an exceptional case, a drawing in excess of the limit fixed for the drawee branch is
required to be made, it should be covered by giving an intimation of drawings in excess of the
limits to the drawee branch for arranging funds to pay the draft. The intimation should be sent
through Fax/e-mail, under copy to Finance Division, Head Office, New Delhi.

18.1 At centers where ‘Centralized Draft Payment Center’ (CDPC) / Regional Collection Center
(RCC) are functioning, draft would be issued on respective CDPC / RCC only.

18.2 As branches located in National Capital Region of Delhi are members of the Delhi Clearing,
Drafts meant for any of the branches located in Delhi State would be issued on CDPC Delhi. (Delhi
National Capital Region (NCR) comprises whole of the Delhi State and some parts of the othe
r
adjoining States.)

19. No branch shall issue drafts on the Extension Counter of any other branch. Instead, the
drafts will always be issued on the concerned parent branch only.

19.1 Extension counter can issue demand draft on other branches.

20. In the new format of the draft forms, in addition to vertical cages on right hand margin
provided for punching the numeral corresponding to the first numeral of the amount of the draft,
vertical cages have also been provided on the left hand side for indicating the denominational
classification, as under:-

(i) Below Rs. one thousand - OT
(ii) Below Rs. ten thousand - TT
(iii) Below Rs. one lac - OL
(iv) Below Rs. ten lacs - TL

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Holes be punched with the help of a punching plier in the appropriate cages, taking care that the
hole does not extend to the adjoining cage.

22. Blank Draft Forms with Name, Address and Distinctive Number of the branch printed
thereon are supplied by Printing and Stationery Department, Head Office. Branches must ensure
that every Draft Form available in the branch is printed with the branch station stamp etc. and if it
is not so, then the Draft Forms must be branded with stamp accordingly. No Blank Draft Form
(without Branch Station Stamp) is to be kept in the Branch.

23. Branches would neither lend its draft books to other branches nor borrow the same from
other branches. The paying branch is free to return the draft if it receives a draft for payment
which is issued by a branch on a Draft Form borrowed from another branch (it would be apparent
as the name of the branch would be superimposed). Since, such returning of draft as unpaid may
result into awarding pecuniary damages if the aggrieved party approaches some `legal forum', the
Financial and other loss, if any, on this count shall be borne by the concerned official(s) at fault
apart from the disciplinary action as may be warranted under the rules and circumstances. To
avoid such situations, it must be ensured that adequate stock of blank Draft Stationery Form is
maintained and requisition for supplies is sent well in time to enable Printing and Stationery
Department to send the same before the existing stock at the branch gets exhausted.
Responsibility for non-availability of draft books at the branch would squarely rest on the
Custodians of Security Forms at the branch.

23.1 It is reiterated that under no circumstances, whatsoever, the branches/offices should use
the borrowed security forms. Even if the branch or an office has merged with some other
branch/office, the security forms books supplied by Ptg. & Sty. Department to the former should
not be used by the latter by putting rubber stamps to change the name.

24. Drafts, being a good source of revenue and float funds, should be issued against Cash
also, irrespective of the fact whether the purchaser is having account with us or not. Customers
tendering small denomination notes for issuance of drafts should not be denied the said facility.

24.1 No Draft / Cash Order for Rs.50,000/- and above be issued against cash, non-compliance
of which shall amount to contravention of the RBI guidelines. These guidelines also prohibit
payment of Draft / Cash Order of Rs. 50,000/- and above in cash. These instructions have
been issued with intention to check the tendencies of misusing the banking channels for violation
of fiscal laws and evasion of taxes. Accordingly, Demand Drafts / Cash Order for amounts of
Rs.50,000/- and above should not be issued against tender of cash. Similarly, cash payment of
draft for Rs. 50,000/- and above should not be made. These transactions should be made to the
debit / credit of Account of the Purchaser / Beneficiary.

24.2 Where draft for Rs 50000/ & above is presented for cash payment across the counter by
another bank under collection of instrument, such payment may be made in cash to the banker.

25. Under ‘Cheque Truncation System of Clearing’ (CTS), instruments bearing any alteration
are liable to be rejected. Hence, drafts should be issued free from alterations and cuttings.
25.1 Draft should be issued by taking a print through the System only. Under exceptional
circumstances, where draft is required to be issued manually, it should be free from alterations
and cuttings. In case of any alteration, the draft should be cancelled and new one issued. As a
precaution against fraudulent alteration, transparent plain cello tape of good quality may be pasted
on the amount in figure so as to prevent alteration in the amount of draft by an unscrupulous
person. The concerned staff must ensure that the Cello tape of suitable width has been affixed

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neatly (wrinkle free) to ensure smooth processing of the instruments in the "Reader-Sorter
Machine" at the MICR Processing Centres.

25.2 To guard against fraudulent alterations, strokes may be placed between each word, while
writing the amount in words (in case draft is issued manually). No space be left in between the
words to guard against fraudulent insertions subsequently.

26. Drafts / Cash Orders for Rs. 25000/- & above should be issued only under the signatures of
two officials under their respective GBPA.

26.1 Drafts below Rs. 25000/- are signed singly by a GBPA holder, the space for second
signatory on drafts remains blank. To protect the blank space from misuse by miscreants by
altering the amount of instrument & forging the signature, a rubber stamp with following text is to
be affixed on all drafts below Rs. 25000/- at the space meant for second Authorised Signatory:

‘Draft is signed singly as it is for an amount below Rs.25,000/-.’

26.2 To facilitate verification of signatures and to guard against forgeries, the officers signing
Demand Drafts must mention their distinctive (P.A.) number clearly. Signatures of signing officials
which are not circularized to the branches, should be got confirmed by another power of attorney
holder and drafts be issued in accordance with the signing powers vested in them.

27. Under exceptional circumstances, if any branch is required to issue draft for amounts of
Rs.25,000/- and above and only one official/employee authorised to sign such instruments is
provided/available, they may issue more than one instrument, instead of issuing a single
instrument for Rs.25,000/- and above. However, commission will be charged as if one instrument
is issued for the total amount.

28. Full particulars of the Drawee Branch viz. the Name, Station with District, State, and
Distinctive Number etc. should be incorporated, at an appropriate place in Demand Drafts.

29. For facilitating speedy issuance of Demand Drafts, the lay-out plan of the concerned
section be such which allows quick movement of inventory/vouchers/drafts between the
concerned supervisor and SWO, so that time lag between issuance of drafts and signing thereof is
curtailed. It is better if draft issue counter is located near the cash receipt counter. In branches
having sizeable Draft issue/payment business, Cash Receipt Vouchers pertaining thereto may be
sent by the receiving SWO direct to the concerned SWO. Guidelines issued on Single Window
System must meticulously be followed. Normally, issuance of draft should not take more than 15
to 25 minutes.

30. The SWO will ensure that details of the transaction are entered for issue of draft, tally the
inventory serial number with serial number displayed, write the transaction number on voucher,
print the draft and print vouchers

31. The authorized officer will verify the correctness of transaction as per guidelines by visiting
all the options, verify the inventory serial number, authorize the transaction(s), and pass the
voucher

32. Before drafts are signed, the authorised signatory/ies, must compare the documents with
the relative vouchers and also with the entries in the system under proper authentication. When
payment for a draft etc. has been received in cash, they must also verify that the amount has been

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entered in the system and that the relative voucher bears the signatures of the concerned SWO.

32.1 The office copy of all drafts will be retained at the issuing office, in an era file serially
branchwise, for record purposes.

32.2 In no case the signature of the payee, even if he is purchaser, be attested on the back of
the draft. Any such attestation done in contravention of the laid down guidelines be ignored by the
paying branch and draft be paid on proper identification.

SPOILT DRAFT FORMS

33. When a draft form is spoilt in preparation, the fact must be noted on the relative office copy
under the initials of a signing official. The spoilt set will be effectively cancelled, by tearing off the
space meant for the signatures of the signing officials and will thereafter, be attached to the office
copy.

PAYMENT OF DRAFTS

34. Paying branch should ensure that the drafts are not returned in a casual / mechanical
manner just because the shortcomings are noticed on the part of the issuing branch. The
purchaser / payee of the draft should not get harassment due to the discrepancies committed at
the time of issue of draft. The Incumbent should ensure that the book of authorized signatures is
kept updated. In case the PA no. on the drafts is not clear/wrong, earlier draft of the same branch
may be referred to and / or efforts should be made to contact the issuing branch wherever
possible. CDPCs / RCCs/ main paying branches at big centres may request for STD facility to
their controlling offices wherever needed.
34.1. Each case of shortcomings in the draft noticed by the paying branch be brought to the
notice of the issuing branch through a letter to enable them to take corrective measure. A copy of
the letter be also sent to the concerned Circle Head for appropriate action against the erring
officials and ensuring non-repetition of the discrepancies.

35. Returning of genuine drafts on account of discrepancies by our own branches puts the
payee in undue difficulty which not only brings a bad name to the Bank but may also involve the
bank in litigation. It should clearly be understood that the bank is responsible for making payment
of a genuine draft and the officials at fault at both the branches will be held personally responsible
for any loss to the bank on this account.

36. Ultraviolet Ray Lamps shall be kept in proper working order, in all the branches / Offices
where cheque processing takes place.

37. In branches where such lamps are not available, requisition may be made to the concerned
Circle Head.

38. Examination of various payment instruments (presently, Rs 50000/- & above) viz. cheques,
drafts, cash orders, etc. under ultra-violet rays shall be a part of the transaction process and all
such instruments shall be paid after verification under Ultra-Violet Ray Lamps.

39. The Regional Collection Centres / Centralised Draft Payment Centers (RCC / CDPC) have
been set up at various cities/centres and as and when any new centre is opened, necessary
information is provided to the branches through circular from Head Office. All RCCs/CDPCs have

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separate distinctive numbers.

40. Drafts meant for Delhi Clearing Member branches, located in National Capital Region,
Delhi are also to be issued on CDPC, Delhi only.

41. For each RCC/CDPC, Branch Serial Number, as usual, will be given separately for each
draft issued on a particular RCC/CDPC as is done in case of draft issued on a branch.

42. Under Core Banking Solution Environment (CBS), a draft issued on any of our branches /
RCCs / CDPCs can be paid at any of our branches. Thus our Drafts are part of the ‘Speed
Clearing’.

43. In each branch Decentralized draft Payable account (DD Account) is maintained. All
branches credit their own decentralized DD account for issuance of drafts and debit the same
account for cancellation and payment of draft. Other service outlets in finacle database cannot
access the a/c for issue/cancellation/payment of FINACLE Draft.

44. If a Demand Draft drawn on other branch / RCC / CDPC (Drawee SOL) is presented for
payment at any of the SOLs (Paying SOL), the Paying SOL would make payment by debiting the
account <SOL ID>3161411 (Draft Payable Account of the Paying Branch). The Paying Branch
shall use its own SOL ID.

45. The details of the draft presented for payment would be displayed on the Monitor by
entering the 8 digit running serial number of the draft. (The running serial number of the draft is
generated by the system. It comprises 8 digits - the 1
st
four digits representing the distinctive
number of the drawee branch and last four digits representing the actual running serial number of
the draft. However, on the face of the draft, only last four digits of the running serial number are
printed along with the year of issue.)

45.1 At the time of Day-end of the Paying Branch, System would credit the Draft Payable
Account of the Paying Branch and debit the Centralized Draft Payable Account (210700
3171200).

46. The usual safeguards viz. verification of the instrument, signatures of signing official(s),
punching of cages, examination of carbon impression on the reverse of the instrument,
identification of payee etc. will be observed before allowing payment.

47. Payment of demand draft issued prior to the date of migration of drawee branch to finacle is
allowed through localized DD account. User branch is not allowed to debit localized DD a/c for
making payment of drafts issued on or after the date of migration of drawee branch to finacle.

48. When a draft is presented for payment, it will be sent to SWO for making entry and to
checking official who will see that the signatures on the drafts are regular and that each draft is in
order in all respects before passing it for payment. He will authorize the entry in the system
against the date of payment at the time of passing the draft, the amount of which will be debited to
drafts payable account.

49. Payment of drafts upto Rs. 25,000/- may be allowed against identification on the basis of
valid Passport, Postal Identification Card issued by Post Office and to Military Personnel on the
basis of their official Identity Cards. But such payments will be allowed after the examination of

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the photo affixed thereon as well as after comparing the signatures of the holder with signatures
on the Passport/Identity Card. Full particulars of Passport/Postal Identification Card/Identity Card
viz. name and address of the issuing authority along with the number and date of issue and expiry
date etc. will be recorded on the reverse of the draft and authenticated by the authorised passing
official(s).

49.1 However, no cash payment of drafts of Rs.50,000/- and above be allowed.

Movement of Inventory

50. Every morning, the DBA shall see from the daily arrangement register that respective
Section In-charge who were having overnight inventory at their employee locations are present. If
an In-charge is absent, he shall disable his user_id and shall then ask the Section In-charge to
move the inventory of user who is absent (as per arrangement register).

51. The SWO shall receive the physical stock of security forms from the Section In-charge and
invoke option in finacle to Verify and physically tally the security forms in hand with the particulars
(i.e. inventory number) displayed by the system. After ensuring that physical stock of security
forms (being printed) in hand tallies with the particulars displayed in the system, he shall ask the
section in charge to put his password against section in charge’s user_id and shall put his
password against his own user id to authorize above movement of inventory. Unless inventory
movement is verified, it shall not be available at the counter clerk’s employee location for use
during the day.

51.1 The SWO shall make use of the inventory for printing of demand drafts pay order etc. On
invoking appropriate print option, the system displays the next inventory number available at his
location

52. The concerned SWO shall return inventory that is lying at his location but which has been
destroyed (i.e torn/mutilated), from his location to the “Destroyed Inventory” (DI) location by
invoking appropriate options. This movement will need authorization by the Officer designated for
authorizing movement from/to destroyed location.

53. Every morning, the Section In Charge shall move inventory from his employee location to
the employee location of his counter SWO and hand over the stock physically to the SWO. Any
Officer who has been authorized to move the inventory from one location to another is known as
Authorised user.

54. At the end of the day, the counter SWO shall hand over the unutilized stock of security
forms (inventory) to his Section In-charge. He shall invoke menu option to move inventory from
his location to the location of the Section In-charge. This movement is akin to the backward
movement of inventory from the clerk to Officer in PNB 862.

55. The section In-charge shall verify and compare the stock of security form handed over to
him by the counter clerk with the particulars displayed by the system. On his satisfying himself, he
shall put his initials on the counter foil of the last inventory item used during the day in token of
having certified the use of last inventory for the day.

56. The SWO will acknowledge the inventory received, ensure the physical receipt of inventory
items, generate a report for movement of stationery, hand over the unutilized stock of security
forms to section in-charge at the end of the day.
OTHER INSTRUCTIONS

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57. If all the particulars are not correct, the verifying officer shall not post the transaction - if the
transaction is in <entered> state.

57.1 If the draft has been issued for wrong amount, the verifying officer shall ask the SWO to
modify draft amount.

57.2 If the commission amount has not been modified or has been modified wrongly, the
verifying officer shall ask the SWO to modify commission amount.

57.3 If the draft has been issued on a wrong center/branch, the verifying officer shall delete the
transaction and ask the SWO to create fresh transaction for issue of draft on the correct
center/branch.

58. If the transaction is already posted and the verifying officer finds above mistakes, he shall
verify the transaction and ask the SWO to cancel the draft as per procedure on cancellation of
drafts described later on in the Chapter and advice to drawee branch. (For operational procedure
please refer to “User Manual – CBS”)

TRANSACTION DELETION

59. Impact of Transaction Deletion: System generates the running serial number of the draft
- drawee branch wise at the entry stage of transaction. If the SWO / Officer deletes the
transaction, the running serial number of the draft generated by the system for the drawee branch
shall be skipped and would not be available for use again at the time of issue of any subsequent
draft on the same drawee branch. Therefore, when the SWO / officer deletes a draft issue
transaction, he shall send a communication to the drawee branch informing the drawee branch
about the skipping of draft serial number. The verifying officer shall ensure that the communication
to drawee branch is sent and shall keep office copy of the communication for future reference and
record.

59.1 System does not prompt or force the user to send any such communication to the drawee
branch. The user shall send the communication procedurally. System however keeps record of
such deleted transactions in the draft issue register and displays the remarks ‘Deleted’ in the
remarks column against the deleted entry.

60. Modification in particulars: If the transaction is lying in <entered> state, then only concerned
SWO can modify draft particulars

Application of Draft commission against cash receipt:

61. System calculates the amount of draft commission from the service charges parameterised
in the system. There is no provision in the system to calculate draft commission at the prescribed
rate, if draft is purchased in cash. Therefore the user branches shall mandatorily modify draft
commission amount to the prescribed rate, if different Service Charges are prescribed for issue of
draft against tender of Cash.

Mass Issue of Demand Drafts

62. For issuing multiple drafts from a single account, the user can issue more than one draft in
a single stroke in CBS environment. The multiple drafts should be issued to the debit of only one
a/c - either cash or customer a/c. System creates a consolidated transaction debiting one single

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a/c of customer a/c and crediting Decentralized DD a/c and draft commission income account of
the draft-issuing branch. SWO shall note down the transaction ID on the draft issue voucher. SWO
shall note down the running serial number of the draft on the credit voucher against the related
draft entry, note down the DD number for the 2
nd
draft and shall continue the process till the DD
number of all drafts is noted on the credit voucher. The SWO shall pass on the credit voucher to
the officer for authorization. The verifying officer shall pass/verify the transaction.

63. While realizing inward bills received from other Banks/ Parties, the user branch is required
to realize the bill and send the credit to the other bank by way of demand draft. The system has
provision for issuance of demand draft as a part of bill realization process through BM option.

64. For issue of demand draft through standing instruction module, the user shall refer CBS
user manual on routine operations in finacle. Broadly there are 2 types of Standing instructions.

(i) Where amount of SI is fixed
(ii) Where amount of SI is variable

64.1 The authorized officer will ensure execution of the standing instructions at the time of day
begin or as instructed by the customer.

CANCELLATION OF DEMAND DRAFTS

65. Cancellation of demand draft is restricted only to the issuing branch.

65.1 The draft should have been printed at least once. Unprinted demand drafts cannot be
cancelled.

66. Only the actual amount of the draft will be paid to the purchaser, i.e. the commission and
other charges will not be refunded. Draft Cancellation Charges, wherever applicable will be
recovered.

67. A request for cancellation of a draft would be made by the purchaser, to the issuing branch,
in writing, accompanied with the relative draft and the refund of its amount made. Signature of
purchaser will be tallied by the original location to identify genuineness of draft and purchaser.
68. Where a draft has been issued in the name of the purchaser and is presented by him for
cancellation, the request may be acceded to, provided it does not bear any endorsement, and the
Applicant’s signature on the application (credit voucher) and letter of request tally. An
endorsement on the draft ‘Received payment by cancellation’ would be obtained from the
purchaser.

68.1 If there is variation in signature of the purchaser, or where some suspicion about the
genuineness of the transaction arises, payment should be made only on identification.

69. Where a draft has been purchased for a third party, the following procedure should be
adopted for its cancellation.

(i) A request for cancellation of a draft would be made by the purchaser. The request letter
should contain reasons for seeking cancellation of the draft.

(ii) It would be ensured that the draft does not bear any endorsement and is presented for
cancellation, within a reasonable period.

(iii) Signature of the purchaser would be verified with that on application form (credit voucher).
Deleted:

12. Updated up to 31.07.2011 I&AD BOI/CH.X Page 12 of 23



(iv) An endorsement on back of the draft would be obtained from the purchaser as under:-

"I/We certify that I/we am/are the lawful holder(s) of this draft. Received payment by cancellation".

70. Where cancellation of a draft for which duplicate has been already been issued, is sought
by the purchaser, the request for its cancellation shall not be entertained unless it is accompanied
by a letter of request from the payee, whose signature should also be attested, preferably by his
bankers.

71. System does not allow cancellation of demand drafts issued prior to migration of issuing
branch to finacle. The procedure for such cancellation will be as under.

(i) If draft amount is less than Rs.25000/-, the user shall debit its HO a/c with the amount of
the draft and create a reversal transaction where original transaction is prior to date of migration.
A simple intimation about cancellation of draft will be sent to the Drawee Branch.

(ii) However, the user shall specify the category code as ‘PRMDD’ (Pre migration DD) in such
transaction. This is because when the user cancels draft issued prior to migration by selecting
above category code, system picks up the entry in the days debit HO extracts - which it does not
require/pick if the user selects category code as ‘DD’.

(iii) The branches will incorporate Alpha Character 'X' in 'Daily Extract' in respect of such
cancellations in Document type column of the Daily Extract to indicate and distinguish such
reversal entries (for drafts below Rs. 25,000/-) from other Document types for facilitating
reconciliation of such entries.

(iv) If draft amount is equal to or greater than Rs.25000/-, the user shall debit suspense draft
cancellation a/c (no.5711322) and cancel the draft and seek reimbursement from the drawee
branch. On receipt of reimbursement from the drawee branch, the user shall adjust the
outstanding suspense entry.

(v) The SWO shall check the record for cancellation, before entering it into the system. The
authorised officer authorise the transactions after verifying that correct draft has been canceled.
He will also verify the correctness of charges.

(vi) In any case, when the user branch cancels a non-finacle draft, he shall send a
communication to the drawee branch informing the drawee branch about the draft cancellation
and seek reimbursement from the drawee branch if the draft amount is equal to or greater than
Rs.25000/-.

(vii) On receipt of reimbursement from the drawee branch, the user shall adjust the suspense
entry.

72. Exceptions Encountered during cancellation:

(i) Cancellation A/c Mismatch
: If the draft is issued to the debit of customer a/c or Cash, then
the cancellation amount is to be credited in same account otherwise system would raise exception
though user can modify the credit account number.

(ii) Cancellation Service Charges Changed
: User can modify the draft cancellation service
charges amount but system will raise this exception.

(iii) Cancellation of Duplicate Instrument
: If the draft being cancelled is a duplicate draft issued
by the system, system would raise above exception. 72.1 The passing officer has the power to override the above exceptions after verifying the
correctness of transaction. However, if the original draft is presented after issuance of duplicate

13. Updated up to 31.07.2011 I&AD BOI/CH.X Page 13 of 23


draft, exception will not be overridden and it must be returned.

STALE DRAFT / CASH ORDER

73. A Draft / Cash Order shall be treated as current, for a period of six months from the date of
issue, after which it becomes stale.

74. No revalidation of such drafts is required from issuing branch. Stale draft / cash order,
when presented for payment, may be paid, if otherwise in order, after the Incumbent Incharge has
satisfied himself, as to the presenter's title.

ISSUE OF DUPLICATE DRAFT IN CASE OF LOSS OF DRAFT

75. There may be loss of blank draft leaves at branch level or loss of draft in the hands of
purchaser / payee. Loss of blank draft leaves printed with branch distinctive number with station
stamp is circulated to branches by Frauds Prevention & Investigation Division (FPIS) through
Special Bulletin of Lost Documents (SBLD). FIPS also updates the data in the system themselves.

76. In the second case (loss of draft in the hands of purchaser / payee’), the loss will be
reported by the purchaser in writing. On receipt of intimation from purchaser in writing, the SWO at
issuing branch will maintain the record in the system by referring the lost document bulletin and
Mark the demand draft as lost

77. When it is reported that a draft issued by the bank has been lost and a duplicate draft in
lieu of it is asked for, a written application containing a statement of the circumstances, in which
the draft was lost, should be obtained from the purchaser of the draft.

78. In case the draft reported to have been lost is issued by a branch prior to its migration
into CBS (FINACLE), its lost status has to be marked by the drawee branch and reported to the
issuing branch accordingly facilitating issuance of duplicate thereof, if required. SWO at issuing
branch is required to maintain / update the record in the system by referring to the “lost document
bulletin”, mark the demand draft as ‘lost’ and send the intimation to the drawee branch seeking
confirmation about non-payment of draft by the drawee branch.

78.1 In case draft is issued by a branch after its migration into CBS(FINACLE) and is
subsequently reported lost by the purchaser, the system permits marking of lost status of that draft
by the issuing branch itself and does not allow the drawee branch to mark caution / lost status in
this regard.

79. In case draft is upto Rs.5000/- duplicate draft may be issued under advice to drawee
Branch and if draft of more than Rs.5000/-issuing office should telefax/telegraph, at the
purchaser’s cost or write to the drawee branch notifying the loss enquiring whether the draft has
been paid. The checking official, of the drawee branch, will personally satisfy himself that the draft
is still outstanding before advising the issuing office to that effect, and will record the fact of the
draft having been lost, against the relative entry in the drafts payable ledger.

80. In case of drafts drawn on RCCs/CDPCs, the details of drafts reported lost be promptly
advised by the issuing branch to the RCC/CDPC. RCC/CDPC will, in turn, pass on the
information to all local branches at that Centre. After collecting information from them as to
whether the draft is still outstanding or has been paid, will communicate the same to issuing
branch. Local branches at the respective Centre, on receipt of information, about loss of draft,

14. Updated up to 31.07.2011 I&AD BOI/CH.X Page 14 of 23


from RCC/CDPC will verify their records and send reply immediately apart from noting caution, in
this regard.

81. A duplicate draft may be issued (under the same number and date), after getting a properly
stamped letter of indemnity (Form No.PNB-7), which should be signed by the purchaser and
ordinarily by two sureties, each good for the amount. If the applicant for a duplicate draft is of
undoubted standing and the amount of the draft is less than Rs.10,000/-, production of sureties
need not be insisted upon but in cases of doubt or when a large amount is involved, reference
should be made to the Circle Head, before it is decided to dispense with the sureties. Prescribed
service charges for issuance of duplicate draft (Circulated by Risk Management Division, HO)
shall also be levied.

82. Stamped Indemnity Bonds for issuance of all duplicate drafts should be obtained and
placed separately in an era file. This file should be kept in strong room/fire resistant steel cabinet
outside the strong room. As and when required, this file should be taken out and must remain
under lock and key in the charge of checking official of the branch. Particulars of such indemnity
bonds should be separately recorded in the Branch Document Register (which is a permanent
record), having a separate opening therein on the following format:-

PARTICULARS OF INDEMNITY BONDS EXECUTED FOR ISSUANCE OF DUPLICATE
DEMAND DRAFT.

S.No.& Branch Date Name of Amount Name of
Date of Sr.No. of issue Benefi- of draft the Drawee
Demand draft ciary Branch

1 2 3 4 5 6
Date of Signature Signature Remarks
Indemnity of purcha- of Officer
Bond ser of Incharge
draft

7 8 9 10

83. When the purchaser, of a lost draft, wants a refund of the amount, the issuing branch
should issue a duplicate, in lieu of the lost document, after completing the required formalities and
refund the amount by cancelling the duplicate draft, in accordance with the prescribed procedure.

84. Duplicate draft must be issued within a fortnight from the receipt of request there for. For
delay in issuing duplicate draft beyond the above stipulated period, interest at the rate applicable
for fixed deposit of corresponding maturity is to be paid in order to compensate the customer for
such delay.

85. If a draft, reported to have been lost, is presented to the drawee branch either through
clearing or on counter, it may be returned with the memo, "document reported lost and duplicate
issued (or paid)", as the case may be.

86. In the event of a draft, which has been reported lost being presented for payment, the
issuing office must be advised by fastest mode such as telegram/fax/email that the original draft
has been presented and it, in turn, will convey the information to the party or parties, who have
executed the indemnity, to the bank in connection with the issue of the duplicate draft.

15. Updated up to 31.07.2011 I&AD BOI/CH.X Page 15 of 23


87. Loss of Issued Draft: When a customer reports loss of demand draft issued by the bank
and asks for issue of a duplicate draft in lieu thereof, the issuing branch shall follow the procedure
and take all safeguards as prescribed. However, date of issue of draft is on or after the date of
migration of issuing branch to finacle. In such case, since the draft is issued from the system, the
system allows marking the draft as lost and issue of duplicate draft. If, date of issue of draft is prior
to date of migration of issuing branch to finacle. In this case the system does not allow marking of
original draft as lost and issuing duplicate draft since the system does not have the particulars of
the original draft.

88. On receipt of the loss of issued draft intimation from the customer, the SWO will mark the
draft as ‘LOST’ in the system. The precautions for the procedure require that:

(i) The draft has been printed.
(ii) The status of the draft in the system should be unpaid at the time of marking the draft as lost.
(iii) As per existing guidelines, the non-payment advice for drafts up to Rs.5000/- is not required from
drawee office for issue of duplicate draft. For drafts above Rs.5000/-, the user shall send a
communication to the drawee branch seeking non payment advice.
89. The authorized officer at issuing branch will:

(i) Ensure maintenance of lost bulletin in the system.
(ii) Check the information and necessary details recorded by the concerned CTO in
the system. He would satisfy himself that the draft is still outstanding.
(iii) Authorize the complete process.
(iv) On receipt of non-payment advice from the drawee branch, the issuing branch
would issue a duplicate draft and this duplicate draft may reach the drawee branch for payment.

90. The authorized officer at Drawee branch will:

(i) Ensure that system is restricting the payment against lost document, if not already
paid.
(ii) Authorize details entered by CTO on receipt of intimation of loss of draft from issuing
branch, in case draft advice has already been received by the branch.
(iii) Ask another authorized officer to verify the transaction if Draft amount >= Rs.25000/-
and original draft issue advice is NOT received and responded at the drawee branch .
Simultaneously, the system creates a transaction debiting HO a/c and crediting the centralized or
localized DD a/c depending upon the date of issue of draft and the date of installation of drawee
branch to finacle. The transaction is created in posted state.
(iv) After responding the loss of draft intimation, the drawee branch would come to know
whether it has already paid the draft reported lost by the issuing branch or not. In either case, the
authorized officer at drawee branch would send communication to the issuing branch procedurally
as there is no provision in the system to send any such communication to the issuing branch.

91. The drawee branch shall take normal precautions as per the existing guidelines of the bank for
payment of duplicate drafts before making payment and follow the procedure given in user’s
manual for CBS branches. The system will not allow payment of original draft after issue of
duplicate draft and follow the procedure laid down.

92. Revalidation of Demand Draft: Existing guidelines do not require revalidation of demand
draft. The same guidelines shall be followed for CBS branches.

PAYMENT OF OLD (NON FINACLE DRAFTS)

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93. When the FINACLE branch attempts payment of a demand draft for which no record in the
system is available, system raises the exception ‘Improper DD Advice’. The bank requirement of
treating only those drafts as ex-advice where draft amount >= Rs.25000/- and advice is not
received does not hold good in FINACLE. The user shall therefore procedurally handle the
payment of draft ex-advice. The passing officer with appropriate powers shall override the
exception and allow payment of draft. The SWO, after seeking permission from authorized officer
will enter reference number in the relevant field as per user manual, print report for list of draft
paid ex-advice generate letters and reports provided in the system at prescribed intervals for
follow up with issuing branch for getting the draft advice/ confirmation of action of drawee branch
in having paid the draft ex-advice till the outstanding entries are adjusted and send a copy of the
statement to CO for further follow up and necessary action at their end.

94. The authorized officer will satisfy himself of the genuineness of the draft and of the identity
and respectability of the presenter(s) and shall initial the draft on the top left hand corner
permitting payment without receipt of the relative advice. He shall also compare the number of the
draft with the serial numbers appearing in the system and verify the correctness of transaction.

95. When draft advice has already been received and responded, the user shall take out the
draft advice from the era file and vouch it with the draft being paid - as per existing guidelines.
PAYMENT OF DRAFTS AT RCC/CDPC

95. Guidelines pertaining to payment of Drafts/Cash Order as per the Book of Instructions
should be meticulously followed in computerized environment.

96. Caution must be exercised before making payment of draft as per guidelines. The
authorized officer will satisfy himself of the genuineness of the draft and of the identity and
respectability of the presenter(s), and will initial the draft on the top left hand corner permitting
payment.

96.1 As a measure to exercise abundant caution against frauds, paying branch should seek
confirmation telephonically from the Issuing Office about the genuineness of the draft before
making payment of drafts amounting to Rs 1 lakh and above issued in the names of individuals.

97. Payment of drafts should not be refused merely because the relative advice (in case of
non-FINACLE Draft) has not been received by the drawee branch. Drafts drawn on the branch
must be paid after observing safeguards, without waiting for the relative advice from the issuing
branch (where applicable).

97.1 For drafts paid ex-advice, it is the responsibility of the paying branch to follow up with the
draft issuing branch for seeking draft advice/confirmation of action of drawee branch in having
paid the draft ex-advice. For the purpose, draft paying branch shall generate at prescribed
intervals, a report of all outstanding drafts paid ex-advice (available in CBS) and do proper follow
up with the issuing branch till the outstanding entries are adjusted.

98. No branch shall issue any draft drawn on an extension counter attached to a branch. In
case a customer wants a draft to be issued on an extension counter attached to a branch, the
issuing branch shall issue the draft on the parent branch. The extension counter shall pay such
draft issued on the parent branch in the following manner: -

(i) the extension counter shall pay the draft by debiting its suspense others account and send

17. Updated up to 31.07.2011 I&AD BOI/CH.X Page 17 of 23


the draft to its parent branch for reimbursement.

(ii) The parent branch shall pay the draft by following procedure as explained
above(operational guidelines are given in user manual) and credit the imprest account of the
respective extension counter maintained with the branch. The parent branch shall send the credit
advice to the extension counter in token of having credited its imprest account.

(iii) The extension counter on receipt of credit advice from parent branch shall debit the imprest
account of the parent branch and adjust its outstanding suspense entry.

99. There may be instances where a draft was issued on the extension counter prior to its
migration to finacle or where the draft is issued on the extension counter after its migration to
finacle but the issuing branch is non-finacle (finacle branch cannot issue demand draft on
extension counter), the extension counter shall make payment of such drafts procedurally as per
operational guidelines for non RCC/CDPC centers.

100. Exceptions which may be encountered during payment of drafts

(i) Draft already paid: System will not allow the user to pay a draft, which has already been
paid earlier. However, there may be a genuine situation also where a non-finacle issuing branch
has issued a draft with the same running serial number on the finacle branch and the finacle
branch has already paid the earlier draft issued by the same branch with the same running serial
number. In such case, the passing officer at drawee branch shall seek confirmation from the
issuing branch about the genuineness of the draft and of the fact that the issuing branch has
issued another draft with same running serial number. On satisfying himself and only after getting
above confirmation from the issuing branch, the passing officer at drawee branch shall pay the
draft as per procedure given in users manual.
(ii) Pyment of Duplicate DD: When payment of a duplicate finacle draft is attempted, system
raises above exception. The passing officer shall exercise great caution while making payment of
such draft. The passing officer shall override above exception only for making payment of
duplicate drafts. If original draft is presented for payment (such draft will be distinguished from
duplicate draft by the word ‘DUPLICATE’ written/printed on the face of duplicate draft), the
passing officer shall return the draft with appropriate remarks - as per existing guidelines.

(iii) Payment of Lost DD: System will not allow payment of a draft that has been reported lost
and for which duplicate has not been issued.

(iv) Payment of stopped DD: The passing officer shall make payment of a draft which has
been stopped, after exercising due caution.

101. TALLYING BALANCES OF DRAFT PAYABLE ACCOUNT

(i) Finacle branches are having two draft payable accounts in the system, a Decentralized
draft payable a/c (no.<sol_id>3161411 for payment of FINACLE Draft and a Localized Draft
Payable A/c for payment of Non-FINACLE Draft.

(ii) At any point of time, there will be some balance outstanding in these accounts, which is the
net of outstanding credit and debit entries. In the weekly statement of affairs and balance sheet,
the system reports all outstanding credit entries under the draft payable credit entries head and all
outstanding debit entries under the draft payable imprest head. The breakup of these entries is
available in the system in the shape of a report called DD reconciliation report.
102. Centralized DD Reconciliation Report: All debit and credit entries related to DD’s, though
created by different finacle branches, shall outstand in the centralized Draft Payable Parking a/c

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maintained at CDPC, New Delhi and hence, will be reflected in the weekly statement of affairs and
balance sheet of CDPC, New Delhi only.

103. Authorized officials at CDPC Delhi will ensure that centralized Draft Payable Parking
account is tallied on daily basis. Each day at the time of day begin, the database administrator will
generate the DD reconciliation report for the previous day. The outstanding balance of draft
payable account as per this report must tally with the outstanding balance of centralized Draft
Payable Parking account as per ACLI of that account for the previous day. The DBA and
Incumbent - CDPC Delhi, will maintain a register (format given below) at CDPC Delhi wherein a
certificate of having tallied the balance of Centralised Draft Payable Parking Account shall be
given on daily basis and signed. In case of difference, the CDPC-Delhi will report to Data Center,
HO, Delhi and coordinate with the Data center for locating the difference.

Proforma for register:

Outstanding Balance As Per Signature of
Date
DD Recon Report
A/c
Ledger
Difference If
any DBA Incumbent


104. DBA/Authorized officer at CDPC, Delhi will take backup of the outstanding report in an
electronic media on daily basis and will preserve the same for future reference and maintain the
record of above storage.

105. The entries related to Non-FINACLE Drafts paid ex-advice or advice responded for unpaid
Non- FINACLE Draft shall be made to the debit/credit of localized draft payable account and will
thus be reflected in the weekly statement of affairs and balance sheet of the drawee branch and
the balance of this account will be tallied by the authorized officers at Drawee branch.

106. Localized DD Reconciliation Report:

(i) At the frequency prescribed for tallying the draft payable balances, the Drawee branch will
generate ‘DD Localized Reconciliation Report’ (PNBRPT). The DBA/ Authorized officer will take
the printout of this report and tally the outstanding balance shown in the statement with the closing
balance of localized draft payable account for the date of generation of the report.

(ii) In case of any difference, the branch will generate draft payable long book for the week
(PNBRPT) that will list date wise credit and debit entries that have happened to the localized DD
a/c and compare the entries with the account ledger inquiry (ACLI) of the account for the above
period and the DD reconciliation report. If the branch finds any credit/debit entry outstanding in the
DD reconciliation report for which accounting entry has not been passed, the branch shall report
the entry to Data center with full particulars of the entry.

(iii) The Data center in such case will find out the reason for difference in the draft payable a/c
and get the needful done.

(iv) The Authorized officer at finacle branches will ensure print out of Drafts issued and Drafts
paid /cancelled.

GUIDELINES FOR RCC AND CDPC

107. At the time of issuing demand drafts branches shall ensure that they issue demand draft on
the respective RCC/CDPC only, if the center on which the draft is to be issued happens to
have an operational RCC/CDPC. For each such RCC/CDPC, the system generates a running

19. Updated up to 31.07.2011 I&AD BOI/CH.X Page 19 of 23


serial number depending upon the issue branch code and drawee branch code combination and
keeps a record of all such drafts - as is done for other drawee offices. Issuing branch shall not
send any draft advice to RCC/CDPC, irrespective of the amount of draft.

108. The RCC/CDPC will make payment of drafts by debiting its Decentralized DD account
online. Since centralized Draft Payable Parking account is maintained at CDPC, Delhi, System
would credit the Decentralised Draft Payable Account of the Paying RCC / CDPC and debit the
Centralized Draft Payable Account (210700 3171200) at the time of Day-end of the Paying CDPC
/ RCC.

However, payment of Non-FINACLE Draft shall be made to the debit of its Localized Draft
Payable account. The RCC/ CDPC will lodge the non-finacle drafts in its Localized draft payable
account separately in the ABCD package. The system will debit the localized draft payable
account and credit the clearing imprest account or the banker’s account - as the case may be.

108.1 During verification, the Officer/Manager will take special care and ensure that the correct
draft has been picked up for payment. If a draft has been wrongly selected, he shall delete the
record.

109. Following Important reports are available in finacle:

Draft Issued Register

Draft Payable & Paid Register
Drafts Paid Ex-Advice
Non Finacle Advice Acknowledged: A report of all non-finacle drafts of Rs.25000/- and above
for which draft advices have been acknowledged on a particular date.

110. DD Localized Inoperative Breakup Report: The drawee branches shall not transfer stale
drafts to a separate inoperative draft payable account. Such drafts will continue to outstand in the
operative draft payable account but for the purpose of reporting, such drafts shall be reported in
the weekly statement of affairs and balance sheet under appropriate heads – ‘inoperative others’ /
‘inoperative over 10 years’. The report is dynamic in nature, hence should be generated at the day
begin.

111. DD Centralized Inoperative Breakup Report
: This report is similar to the above report
except for the fact that this report gives breakup of operative and inoperative drafts outstanding in
centralized draft payable parking account and affects the weekly and balance sheet of CDPC,
Delhi only. The user at CDPC, Delhi shall generate the above report.

112. DD Localised Reconciliation Report
: As per existing system of the bank, the drawee
branch making payment of draft is required to tally balances of draft every Friday. For
reconciliation of localized DD account and to have a breakup of the outstanding draft payable
credit and imprest entries as reported in the weekly statement and balance sheet, the CBS
branches shall generate above report.

113. DD Centralised Reconciliation Report: This report is similar to above report except for
the fact that this report gives details of all outstanding unpaid and paid without advice entries in
centralized draft payable parking account and shall be generated at CDPC, Delhi by using menu
option .

20. Updated up to 31.07.2011 I&AD BOI/CH.X Page 20 of 23


114. Report on missing DD numbers at drawee branch: The menu option for generation of
this report is PNBRPT. This report gives list of all drafts that have not been received at the drawee
branch for payment if draft amount < Rs.25000/- and if draft amount >= Rs.25000/-, neither draft
has been received for payment nor the related draft advice received.

115. CDPC Report - Consolidated amount of ex-advice DD paid by branches: This is same
as above report except for the fact that it is in the shape of a report and not in the shape of letter.
FAKE INSTRUMENTS-DETECTION

116. To guard against fake/counterfeit drafts etc., branches are advised to be extra cautious
while making payment of drafts and use UV Light Source / Magnifying Glass, as per guidelines.

117. The quality of paper, micro ground printing, the size of the instrument, the branding of the
particulars of the issuing branch and signatures of the authorised officials are some of the
important aspects which can help in detecting/distinguishing fake drafts from genuine ones.


TRANSFER PAYMENT ORDERS (TPOs)

118. Bank has discontinued the System of Issuing TPO as a mode of Transfer of Funds
between two Offices / Branches.

119. In respect of TPOs already issued by branches before their migration to CBS, the receiving
offices (drawee office) will enter the TPO, serially, in the transfer payment orders received register
(Form No.PNB-11) in separate branch-wise opening. Each transfer payment order will then be
countersigned by a checking official after he has verified the issuing officials' signatures and the
debit Head Office Account voucher will be prepared on the instrument itself, the amount being
disbursed according to the instructions stated therein.

120. Procedure for cancellation of Transfer Payment Orders already issued

120.1 Cancellation of TPO, where the same has not been despatched

The branches should cancel the TPO and mark the same in the TPO Issue Register. The
instrument should also be marked as cancelled. The portion of TPO meant for signature of
authorised officials should be torn by the checking official. The remaining portion should be kept
along with the office copy of TPO book. In this case the fact of issuance of TPO will not be
reflected in the daily extract. The issuing branch will use the same serial number of the TPO at
the time of issuing subsequent TPO.

120.2 Cancellation of TPO where the same has been despatched.

When the TPO has been despatched to the concerned branch, the issuing branch will send a
communication to cancel the same and for refund of the amount remitted.

The receiving branch on receipt of the TPO and intimation for its cancellation from issuing branch
would debit Head Office Account of the issuing branch and remit the same to the issuing branch
by credit to Non-customer Sundry Account of Issuing Branch.

21. Updated up to 31.07.2011 I&AD BOI/CH.X Page 21 of 23


121 Cash Order

121.1 Cash Order would be issued by selected branches only, as per Para (3) above. Security
Form for Draft shall be used for issuing Cash Order.

121.2 In case of cash order, the system will print “Cash Order & Not Transferable” in a box on top
middle of the draft form, words “or order” will be deleted and the word “only” be added after the
name of payee, to make the text features exactly same as of existing cash order.
121.3 As a Cash Order is not transferable, it may only be paid to

a) The payee, on identification.

b) the payee's bankers, who should certify that the amount has been placed to the payee's
credit, or

c) a person holding a letter of authority from the payee whose signature must be known to the
bank and, if the letter directs the bank to pay the money to a certain named person, that person
must be identified to the bank before payment is made. In such cases, the only endorsement on
the Cash Order, should be the payee's receipt, the person authorised to receive the money giving
a stamped receipt for it on the letter of authority.

STALE CASH ORDERS

124. A Cash Order is current, for a period of six months, from the date of its issue, after which it
becomes stale. The branches shall not transfer stale cash orders to a separate inoperative
account. Such cash orders will continue to outstand in the operative cash order account but for the
purpose of reporting, such cash orders will be reported by the system under appropriate heads -
inoperative over 10 years and inoperative others - in the weekly statement of affairs and balance
sheet. A report for break up of operative and inoperative cash orders is available in PNBRPT.

22. Updated up to 31.07.2011 I&AD BOI/CH.X Page 22 of 23


NOTES:

23. Updated up to 31.07.2011 I&AD BOI/CH.X Page 23 of 23


NOTES: