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Cheque Bounce Rules: You must have heard about cheques. Those who do banking work are well aware of cheques and also know that online mode and UPI, etc., are the modern means of money transactions, but the work of withdrawing money from cheques has been going on for years.

However, one thing that people know a little less is that if the cheque bounces or gets rejected, then people have to pay a penalty, and its effect can also come in the CIBIL history. There is even a provision for punishment in more serious cases. Let us tell you that the penalty imposed on a bounced cheque varies depending on the bank and the amount of the cheque.

What is cheque bouncing?
When a cheque is deposited in the bank for payment, but it gets rejected due to reasons like insufficient funds in the account or signature mismatch, then it is called cheque bouncing. The main reason for this is usually not having enough money in the account. If the check bounces, the bank imposes a penalty, and the amount is deducted from your account. This can also be a legal offense.

When the check bounces, you have to inform the debtor about it, and that person is required to make the payment to you within a month. If the payment is not made within a month, a legal notice can be sent to him. Even after this, if he does not respond for 15 days, a case can be filed against him under section 138 of the Negotiable Instruments Act 1881.

Provision of up to two years imprisonment in law for check bouncing-
Check bouncing is a punishable offense. When a check bounces, a case can be registered under section 138 of the Indian Penal Code. If found guilty, there is a provision of imprisonment up to two years, or a fine up to twice the amount of the check, or both. In addition, the debtor may have to pay the amount of the check with interest.

Let us tell you that the case will be registered at your place of residence. The penalty for a cheque issued by a customer will be Rs 350 (one cheque returned in a month), Rs 750 if the cheque is returned twice in the same month due to financial reasons. Rs 50 will be charged if there is a reason other than signature verification and the cheque is returned due to financial reasons.

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.