Indian Banks’ Association

As Banks have since long undertaken the activity of discounting/publishing bills accompanied by Lorry Receipt, in order to provide them some additional security for this, Indian Banks’ Association has already requested the Government of India and the Reserve Bank of India to take early measures to make the Lorry Receipt a document of title.

A Model Scheme for licensing Transport Operators has also been prepared under the amended Motor Vehicles Act and circulated by the Central Government to the State Governments asking them to introduce a scheme for licensing the Transport Operators to ensure that the Lorry Receipts are treated on par with the Railway Receipts and that obligations similar to those on the Railways are placed on the licensed Transport Operators. But, as far as the Association is aware, the Model Scheme is still to be implemented by the State Governments.

In the meantime, Banks continue to discount bills accompanied by Lorry Receipts. A Lorry Receipt is not, in a strict sense, a document of title in law and the Association has been advised that no usage has been sufficiently established to enable the Lorry Receipt to be treated as a document of title. It is, therefore, necessary to ensure that it should at least be treated on par with a document of title. In order to do so, Indian Banks’ Association finalized a Scheme for Recommending Transport Operators and the documentation under it. It came into operation from 16th August, 1975. The Scheme has since been simplified.

For details of the scheme, please contact:

Indian Banks’ Association

6th Floor, Centre 1

World Trade Centre

Cuffe Parade

Mumbai 400005

Telephone: 22174040 Fax: 22184222 / 22154131


The purpose of this Scheme is to lay down:

(i) Criteria for Indian Banks’ Association recommending names of Transport Operators to Member Banks, and

(ii) Obligations that should be accepted by such recommended Transport Operators.

In this way, the Scheme will assist and guide Member Banks in preparing their own Approved List of Transport Operators on the basis of the Association’s recommendation, for the purpose of enabling them.


(i) to allow their customers to borrow against documentary bills accompanied by the Lorry Receipts in the Special Form issued by such Approved Transport Operators, or

(ii) to discount or purchase bills drawn by their customers and accompanied by such Lorry Receipts in the Special Form.

The documentary bills accompanied by such Lorry Receipts in the Special Form would thus constitute security for advances granted or bills purchased or discounted by Banks.

The recommendations of the Association under the Scheme are meant only for the confidential use and guidance of Member Banks, and not for their customers or for any third party. Moreover, in recommending a Transport Operators to Member Banks, the Association does not assume any responsibility with regard to the integrity, honesty or efficiency of the Transport Operator. All that the Association’s recommendation conveys to Member Banks is that the Transport Operator

(i) satisfies the criteria under the Scheme

(ii) has completed the prescribed documentation, and

(iii) has undertaken the stipulated obligations, under the Scheme.

Moreover, the Association’s recommendation is made on the express condition that it does not attach any responsibility to the Association or to any of its Officers. It would not, therefore, be correct to form, or let the customers of Banks or the general public to form an impression that the recommendations of the Association give any assurance, guarantee or protection to them regarding any Transport Operator. Similarly, it would not be correct for Banks to refer to the Association or to ask their customers to so refer cases of customers’ unless the Bank has advanced against or discounted bills accompanied by his Lorry Receipt in the Special Form. Thus, the Association would rely more on the experience and judgement of Member Banks regarding any recommended Transport Operator rather than on those of Banks’ customers.