What are Cheque Return Charges? By Athulya - February 16, 2016 Last Updated at: Oct 05, 2020 0 3371 If you are on the receiving end of a bad check, you can seek legal actions to earn back your dues. Cheques provided as a donation or a gift shall not be contested. Banks are put to additional work when a cheque bounces and both the cheque issuer (drawer) and the payee (one in whose favour the cheque is drawn) are penalised for such returned cheques. The drawee bank (where the drawer has an account) charges the drawer for the outward return cheque and the presenting bank where the cheque was deposited by the payee (where the payee has account) charges the payee for the inward return cheque. The charges for cheque outward return are higher and around Rs. 300 whereas for cheque inward return they are around Rs. 100. You can find out the exact charges from the bank’s service charges list. Charges can be higher in premium accounts. Some banks have higher penalty charges on exceeding a certain number of misses in a period. The charges for the lack of sufficient funds in the account are applicable on payment through electronic funds transfer as well. A few banks do charge a small fee on cheques drawn on them if they are returned for technical reasons other than system or power failure. Others may not charge for cheques returned due to technical reasons. Talk to Our Legal Experts If you are in the receiving end of a bad cheque, you can take legal measures to recover your dues. Cheques given as donation or gift cannot be contested. Before taking legal measures, ask for your bank’s cheque return memo, which will tell you why the cheque did not clear. Clarify things with the issuer and deposit it again if it is expected to be honoured. The cheque should be presented to your bank within three months of the date put on it beyond which it is invalid.