It is likely that your cheque will bounce if it is presented to the bank when there is not enough money in your account. This occurs because the check amount exceeds the amount in your account. In spite of the fact that this is a common occurrence, it will result in penalties.let us know more about What Are The Charges In Case Of A Cheque Bounce .
What is the Charges for Cheque Bounce?
Charges for Cheque Bounce is close to ₹300, When a check is presented to a bank and returned by the bank due to a defect, it is known as a bounced check.
There may be several reasons why a check bounces
- Insufficient funds
- The amount stated on the check exceeds the amount to be drawn from the account based on a prior agreement.
Notice on Cheque Bounce Cases
Immediately send a letter (a demand notice) to the party that deposited the bounced check, threatening to take legal action under the Negotiable Instruments Act (N.I. Act) if the amount due is not paid.
Prosecutors usually offer prompt settlement when they threaten to prosecute (if the drawer is an individual, the proceedings would be under Section 138 of the N.I. Act.
When a company is sued, its managing director may be personally prosecuted under Section 141). You must send the demand notice within 30 days after discovering that the check has been received. Issued to you bounced. Its purpose is to demand payment and inform the issuer that they will be prosecuted if payment is not made within 15 days. You have to Look for the Charges for Cheque Bounce in case you made a mistake.
It should contain the following information:
- A statement that you presented the cheque within its period of validity.
- Statement of debt or legally enforceable liability.
- Information about the reason for the dishonour of the cheque (check the memo of the bank returning the cheque for this).
- Calling upon the drawer to pay the amount due.
- A statement that you are giving the drawer 15 days to pay up or you will initiate legal action.
A lawyer is not required to send this notice, but you may get it vetted by a lawyer for a few hundred rupees. The notice often becomes the point of fierce battle when a dispute does reach trial.
You must provide proof of service for the notice – courier it if necessary, and send a copy by registered post or speed post. A speed post is enough if you don’t have a time constraint. In the following scenarios, if no payment has been received by the 15th day, you need to file a complaint before a magistrate within 30 days. Where the check was drawn, presented, returned by the bank, and where the demand notice was served.
If the demand notice has been sent, the drawer asks you to present the check again, which is dishonoured. The drawer’s time limit remains the same as under the demand notice. You could not take legal action if the check were issued as a gift, donation, or any other obligation not covered by Section 138 of the N.I. Act. Legally enforceable or if the validity of cheque is over (issued more than three months ago).
Civil and Criminal Charges for Cheque Bounce
If you do not file criminal charges against the issuer, they can get away with only a small fine paid to the bank for a cheque Dishonored case. However, if you file a civil or criminal case against you, the N.I. Act 1881 would apply. Section 138 of the Act states that any cheque bounce case is punishable under the Act. And it can lead to up to two years of imprisonment, a monetary refund or both.
Moreover, according to RBI guidelines, banks can stop issuing cheque book facilities to any customer booked for a bounced cheque. The minimum stipulated offence rate is at least four times on cheques valued over ₹1 crore.
Bank Penalty
Suppose a cheque bounces due to insufficient funds or other technical reasons, such as signature mismatch. In that case, their respective banks charge for both the defaulter and the payee. The penalty charges for cheque outward return close to ₹300 for most banks, while cheque charges inward return about ₹ 100.The penalty charges vary from one bank to another and differ for different account types. Premium accounts usually have higher penalty charges.
Impact on CIBIL Score
A bounced cheque can dent the financial credit history of a drawee. Even a single bounce case can impact your CIBIL score irreparably to the extent that you can be denied a loan in the future. A CIBIL score is critical for your business since it can invariably affect your equation with the investors or the banks when you approach them for your loan.The best way to keep your CIBIL score healthy is to ensure your Cheque Bounce Cases are never dishonoured. Also, you have significantly more funds than the minimum balance in your account after cheque encashment.
There are, however, instances when the cheque may have bounced due to:
- Spelling errors
- Mistakes in dates
- Overwriting
- Signature mismatch
- Closed bank account
- Low funds in the account (it will be a gross irresponsibility to issue a cheque if funds are low)
- The disparity in the amount written in figures and words, and so on.
To avoid criminal charges or any of the above offences, the drawee must reissue the Check Return Memo within 30 days of intimation once they receive the check return memo. If the payment is not made within the specified period (usually 15 days), it will be considered an offence.
Payees may take you to court for criminal charges. A 30-day notice is given before filing a complaint. Several reasons and cases cause checks to bounce; whatever they may be, it is essential to take care while issuing checks. You should ensure that the checks you issue are legible and clear. If a bounce case/notice is issued, respond with payments within the stipulated time frame.
Charges for Cheque Bounce in SBI Bank:
-
Cheque/bill deposited with the bank returned unpaid by others (Local/ Outstation) Charges
- Cheque/bill up to ₹1 lakh ₹ 150/- + GST
- Cheque/bill above ₹1 lakh ₹ 250/- + GST
-
Cheques drawn on SBI (for insufficient funds only) Charges
- For all customers, ₹500/- + GST, irrespective of the amount
- Cheque returned charges for Cheques drawn on SBI (for technical reasons) for all customers ₹ 50/- + GST
Charges for Cheque Bounce in ICICI Bank:
- Local cheque deposited by customer ₹100 for every cheque return for financial reasons
- Cheque issued by customer ₹350 for one cheque return per month; after that, ₹750 per return in the same month for financial reasons ₹50 for non-financial reasons except for signature verification
- Transfer cheque returns will be charged at ₹ 350 per return for financial reasons.
- Outstation cheque deposited by customer ₹150 plus other bank charges at actuals per cheque
Charges for Cheque Bounce in HDFC Bank:
- Cheque return charges have drawn on us – Local Due to insufficient funds
- First cheque return in a quarter –₹350
- From the second cheque return in the same quarter –₹750 per return
- Charges due to funds transfer cheque return –₹350
- Due to technical reasons – ₹50/-
- (ex. – Alteration not allowed, Amount in Word / Figures Required, Cheque Altered – Refer to Drawer, etc.)
- Cheques deposited returned unpaid Charge of ₹100 per instance.
- Stop payment charges (request from the customer not to honour cheque issued) at Branches Particular cheque–₹100
- Range of cheques –₹200
- No Charge through PhoneBanking and NetBanking
Conclusion:-
However, The Supreme Court has recently said that as per the amended Section 148 of the N.I. Act, the accused shall deposit an amount of 20% of the fine or compensation to appeal against the order in a cheque bounce case. If you still have any doubts regarding Charges for Cheque Bounce, do contact our team or leave us your comment below.
FAQ’s on Charges for Cheque Bounce
Is there any charges for cheque bounce?
Yes, there are charges for a cheque bounce. The charges vary from bank to bank but are typically around ₹300.
What is the new rule of cheque bounce?
The new rule of cheque bounce is that the offence is punishable by up to two years in prison, a fine equal to twice the value of the check, or both.
What is the cost of cheque bounce legal notice?
The cost of a legal notice for a cheque bounce case can vary depending on the legal professional or firm you engage.
Do banks Charges for Cheque Bounce checks?
Yes, banks charge for bounced checks. The charges vary from bank to bank and can be around ₹300.
Who pays for bounced cheque?
The issuer of the bounced cheque is responsible for the penalty on the dishonoured cheque.
How do I avoid a Charges for Cheque Bounce?
To avoid a Charges for Cheque Bounce, ensure that you have sufficient funds in your account to cover the amount of the cheque.
What happens if cheque bounces 3 times?
If a cheque bounces multiple times, it can lead to legal action under the Negotiable Instruments Act, including penalties and possible imprisonment.
Why is cheque bounce illegal?
Cheque bounce is illegal because it is a contravention of Section 138 of the Negotiable Instruments Act of 1881, and it can lead to penalties and legal consequences.
What is the time limit for cheque bounce case?
The time limit for filing a cheque bounce case is 45 days from the date of sending the legal notice.
Can police take action on cheque bounce?
Yes, the police can take action when a complaint has been filed as it is a punishable offence under the Negotiable Instruments Act.
Can I get bail in cheque bounce case?
Yes, bail is available in cheque bounce cases, but it is subject to the discretion of the court and the specific circumstances of the case.
Does cheque bounce affect CIBIL score?
Yes, cheque bounce can affect your CIBIL score and have a negative impact on your creditworthiness.
What are the side effects of bounced cheque?
The side effects of a bounced cheque include penalties, legal consequences and a negative impact on your financial reputation and creditworthiness.
