What will happen if a cheque gets bounced and what are the penalties?


The computerized payment framework is picking up a considerable measure of popularity nowadays, which is just a sign of nation moving towards the digitization of payment without breaking or day to day work routine. Despite the fact that computerized payments are getting huge one ought not to disregard the procedure which was pursued to exchange cash starting with one financial balance then onto the next record before the digitalization happened.


Understanding Cheque

Before the computerized payment framework began, individuals used to pull back and exchange cash from their ledgers utilizing cheque. When you open a record with a bank, they issue a chequebook alongside different things, for example, passbook, charge card, etc to the record holder. Issuing a cheque to a man or a substance is a composed request to the bank to pay an explicit measure of cash from the cheque holder’s account to the person account’s whose details have been mentioned.

Well it is easy to wrtie a cheque but hyou should keep a few things in mind befor issuing one. One mistake can let your cheque bounce.

What do you mean by “Cheque Bounce” or “Disrespected Check”?

A cabinet issues a cheque in an offer to make a payment to a substance or a man. It is a composed pledge to pay cash by the cabinet to the drawee. The expressions “Cheque Bounce” or “Shamed Check” are utilized when a bank dishionoures the cheque.

What are the conceivable reasons because of which a bank can dishonour a cheque?

A bank can decline to make payment referenced on a cheque because of different reasons. Some of them are referenced as pursues:

Lacking assets in the payer’s ledger

Mark missing or bungle

Record number bungle

Issue with the date of the check

Bungle in sum in words and numbers

Deformed or harmed check

Intersection limit of overdraft

Writing, overwriting or exclusions on the check without authorization (signature) of the payer

Check is terminated

Drawer account is shut

Payment is halted by the drawer

The seal of the organization is absent on the check issued by an association


What will happen next if it bounces?


According to the Negotiable Instruments Act, 1881, if a cheque is shamed by the bank because of lacking cash in the financial balance of the drawer then it is a criminal offense. In such a case, the drawee bank issues a ‘Cheque Return Memo’ to the payee’s bank referencing the explanation behind non-installment. Thusly, the payee’s bank handovers the skiped check and the notice to the payee.

Presently the payee has the decision to either re-present the cheque within the three months from the date referenced on it or file a case against the drawer. On the off chance that the payee continues with the previous decision and in the event that even the second time, the drawer fails to make the payment, the payee has the privilege to sue the drawer. In any case, the payee can sue the drawer just if the sum referenced on the shamed mark is to satisfy an obligation or some other risk of the drawer towards payee. The drawer, however, can’t be sued if the cheque was issued as a gift or to lend a loan and also for any unlawful activities.

What occurs if the payee makes a lawful move against the drawer?

In the event that the payee chooses to continue legitimately, a shot is given to the cabinet to pay the cheque sum quickly. For this, the payee should send a notice to the drawer within 30 days from the date the payee gets the “Check Return Memo” from the bank. The notice should express that the amount mentioned on the cheque must be paid to the payee within just 15 days of getting the notice.

In the event that the drawer still neglects to pay cash to the payee within those 30 days of accepting the notice, the payee has full right to document a criminal report against the drawer according to the Section 138 of the Negotiable Instruments Act, 1881. In any case, the dissension or report ought to be enlisted in an officer’s court inside multi month of the expiry of the notice time frame.

Following are the penalties charged by various popular banks:

SNo. Bank Charges
1. SBI


Cheque/bill deposited with SBI returned unpaid by others (Local/ Outstation)

·      Cheque/bill up to ₹1.00 lacs – ₹150/- + GST

·      Cheque/bill above ₹1.00 lacs – ₹250/- + GST


Cheque Returned Charges for Cheques drawn on SBI (for insufficient funds only) (for all segments)

·      ₹500/- + GST (irrespective of the amount)


Cheque returned charges for Cheques drawn on SBI (for technical reasons) for all segments when customer is at fault.

·      ₹150/- + GST

2. HDFC Bank ·      Savings A/c

Outward: ₹100/-

Inward: First cheque return in a quarter – ₹350/-. From second cheque return in the same quarter – ₹750/- per return


·      Current A/c

Outward: ₹50/-



Dishonour of Outstation Cheques


·      Regular Savings

Outward: ₹100/-



·      Senior Citizen Account

Outward: ₹80/-


3. ICICI Bank Local Charges

·       Cheque deposited by customer – ₹100/- (for every cheque return for financial reasons)

·       Cheque issued by customer –₹350/- (for one cheque return per month); ₹750/- per return in the same month for financial reasons. ₹50/- for non-financial reasons except for signature verification for every cheque return for financial reasons.


Outstation Charges

·      Outstation cheque deposited by customer – ₹150/- + other bank charges at actuals per cheque.

4. Axis Bank Return of cheques deposited at home branch for local clearing – ₹500/- per cheque
5. Bank of Baroda Cheque (deposited by BOB’s customer and returned unpaid (Inward Return)

·      Up to ₹1 lac – ₹125/-

·      Above ₹1 lac to less than ₹1 crore – ₹250/-

·      Above ₹1 crore – ₹500/-

Cheque (drawn on BOB) returned (Outward Return)– (Financial Reason)

·      Up to 1 lac – ₹250/-

·      Above ₹1 lac to less than ₹1 crore – ₹500/-

·      For ₹1 crore and above – ₹750 per instrument

In case the bank remains out of funds; actual interest @ 7.5% over base rate is to be charged extra

For other reasons ₹250/-


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