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CHOM 415

Updated: Dec 18, 2020

 20 December 2006


TO : All Clearing Banks/Institutions


RE : AMENDED IMPLEMENTING PROCEDURES COVERING “SPECIAL RETURN ITEMS BY DIRECT PRESENTATION” UNDER

SECTION 21 OF THE AMENDED CHRR


1. A number of banks reportedly continue to refuse to accept/acknowledge transmittal letters covering items to be

returned beyond the 24-hour reglementary rule via direct presentation as prescribed under Section 21 of the

Clearing House Rules and Regulations(CHRR).


2. Such non-compliance apparently stemmed from the notion that by acceptance/acknowledgment of receipt, the

Receiving Bank already agrees to the Drawee (returning) Bank’s demand against the check that is being returned.


3. To address this concern and as instructed by the PCHC Board in its meeting of 15 November 2006, we are updating

the implementing procedures of Section 21 of the CHRR, to wit:


3.1 Drawee (returning) Bank/Branch


3.1.1 Prepares transmittal letter (pro forma sample enclosed as “Annex A”) addressed to the presenting

bank/branch covering:


a. Certified true (photo) copy of item to be returned.

b. Affidavit of the payee of the check if reason for return is “forged endorsement” and/or affidavit of the

drawer (maker) of the check if item is to be returned for reason of “material alteration”. (Please refer to

“Annex B” and “Annex C”.)

c. Duly accomplished and encoded MICR Special Clearing Receipt.


3.1.2 Delivers letter and aforestated accompanying documents to the presenting bank/branch by

messenger/special courier.


3.2 Presenting (collecting) Bank/Branch

3.2.1 Receives the transmittal letter and the accompanying documents after checking the authenticity of the

photocopy against the original of the item to be returned. Acknowledgement of receipt is MANDATORY

but such receipt does not constitute an admission of liability neither should it be construed as agreement

to the Drawee Bank’s demand. ∗ (The representative of the presenting bank/branch who signs for the

documents must be an Authorized Signatory).

_____________________________

Presenting Banks may include/integrate the phrase in the receiving rubber stamp.



 3.2.2 Mandatorily responds in writing to the claim of the drawee (returning) bank/branch within five (5)

clearing days from date of receipt of the item and supporting documents, as follows:


a. If documents are found to be in order, accepts/signs all copies of MICR SCR and gives original and

triplicate copies of the SCR to the drawee bank/branch in exchange for the surrender of the original

item/check.

b. Otherwise, if documents are found to be unacceptable, forwards a counter affidavit/claim to the

drawee bank/branch.


3.3 After five (5) clearing days and no response is received from the collecting bank/branch and/or all feasible

means of amicable settlement have been exhausted, drawee bank/branch may elevate/submit its claim to the

Arbitration Committee.


4. The detailed procedures for the elevation to the Arbitration Committee of claims between participating banks are

covered by CHOM No. 81 dated June 24, 1982, as amended in CHOM Nos. 406 and 406-A, dated 20 June 2005 and

07 November 2005, respectively.


5. Banks are enjoined to strictly observe the foregoing procedures in order to preclude sanctions or penalties that

may be imposed by the PCHC Board should non-compliance continue to persist.


6. This supersedes CHOM No. 82 dated 24 June 1982.


CHOM.415
.AMENDED IMPLEMENTING PROCEDURES
Download AMENDED IMPLEMENTING PROCEDURES • 34KB

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