Cheque Bounce Penalty Charges levied by different Banks

A cheque bounce has the potential of causing immense damage to the issuer of the cheque if the receiver wishes to sue him/her in the Court of law. Not only this, the banks even levy charges on the customers if the cheque is bounced. This article deals with the charges that are levied by the Banks in India when a cheque is dishonored.

Charges Levied by Different Banks in India

As stated earlier, when a cheque bounces, the banks charge a fee. Both the defaulter and the payee could be charged by their respective banks. This fee is generally an NSF fee i.e. when there are insufficient funds in the account and the bank decides to bounce the cheque. Not all banks charge the same amount, the fee varies from one bank to another. The amount of this fee depends upon the reasons and nature of the cheque bounce along with the type of account. This charge also attracts GST. Given below are the different cheque bounce charges as charged by different banks in India taken from their respective websites and platforms. Cheque Bounce Charges for ICICI Bank

ICICI policy for charges for Cheque Bounce / Returns is as follows:

1. Local Cheque Deposited by Customer - Rs. 100 for every cheque returned for financial reasons

2. Cheque Issued by Customer - Rs.350 for one cheque return per month Thereafter, Rs.750 per return in the same month for financial reasons, Rs.50 for non-financial reasons except for signature verification. Transfer cheque returns will be charged at Rs. 350 per return for financial reasons.

3. Outstation cheque deposited by the customer - Rs.150 plus other bank charges at actuals per cheque Cheque Bounce Charges for SBI Bank

The charges of SBI are as follows:

A. Charges for Cheque or Bill deposited with the Bank returned unpaid by others (Local/Outstation)

1. Cheque/bill up to Rs. 1 Lakh - Rs. 150 + GST

2. Cheque/bill above Rs. 1 Lakh - Rs 250/- + GST

B. Charges for Cheques Drawn on SBI (for insufficient funds only)

1. For all customers - Rs. 500 + GST, irrespective of the amount

2. Cheque returned charges for Cheques drawn on SBI (for technical reasons) for all customers (Not to be charged where the customer is not at fault as per RBI guidelines) - Rs. 150 + GST Cheque Bounce Charges for HDFC Bank

Cheque return charges drawn on HDFC Bank are as follows:

1. Due to insufficient funds (Local)- Rs. 350

2. Due to technical reasons (Local)- No charge

3. Non-maintenance of Average Quarterly Balance (Local)- Rs. 400

4. Cheque return charges drawn on HDFC deposited in other locations -Rs.75

5. Cheque deposited returned unpaid - Rs. 100 per instance would be levied

Cheque Bounce Charges for Punjab National Bank

In the case of Punjab National Bank, the cheque return/bounce charges are dependent upon the amount stated on the cheque. The same has been given below:

A. Dishonour of cheques for want of funds or for any other reasons not attributable to PNB (Inward Clearing):

1. For cheques up to Rs. 100,000 - Rs. 300 per instrument

2. For cheques above Rs. 1 Lakh and up to Rs. 1 Crore - Rs. 500 per instrument (interest at the applicable rate for no. of days bank remained out of fund)

3. For cheques above Rs 1 Crore - Rs. 2000 for 1st cheque and Rs. 2500 per instance from 2nd cheque onwards during the month

B. Dishonour of cheques received by PNB Customers and deposited for presentation in the clearing house (Outward Clearing):

1. For cheques up to Rs. 1 Lakh- Rs. 100 per instrument

2. For cheques above Rs. 1 Lakh - Rs. 200 per instrument + out-of-pocket expenses if any

C. Local Cheques for presentation directly at the drawee bank - Rs. 100 + out-of-pocket expenses or 50% of collection charges whichever is higher

D. Local Bills for presentation directly at drawee bank/drawee - Rs. 200 + out-of-pocket expenses or 50% of collection charges whichever is higher

E. Returning Charges for Outstation Cheques/Bills

1. Cheques up to Rs. 1 Lakh - Rs. 100 per instrument + out-of-pocket expenses

2. Cheques above Rs. 1 Lakh - Rs. 200 per instrument + out-of-pocket expenses

3. Bills - Rs. 200 + out-of-pocket expenses or 50% of collection charges whichever is higher

F. Standing Instructions

1. Registration - Rs. 50

2. Execution - Rs. 35 + Remittance Charges + Out of pocket expenses

3. Non-Execution Charges (due to insufficiency of funds) -

• Rs. 50 per transaction for non-individuals

• Rs. 35 per transaction for individual customers of Semi-urban, Urban and Metro Branches

• Rs. 35 per transaction for individual customers of Rural Branches, Sr. Citizens & Pensioners (Charges for Sr. Citizens & Pensioners are Irrespective of Location of Branch)

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Negative Impacts of Cheque Bounce

1. CIBIL Score: Financial credit history is also affected and hampered when cheques are bounced. Even just one scenario of cheque bounce can negatively affect your CIBIL Score to an extent that you can be refused a loan. So to ensure that the CIBIL score is active and up, you need to make sure that the cheques are never defiled and that the account possesses enough balance. 2. Other negatives: The RBI also states that a bank is allowed to restrict the issuing of a cheque bounce to a customer who has been or is repeatedly booked for a cheque bounce offense. The maximum chances that can be offered to a customer for cheques is more than Rs. 1 Crore. More than that, if any collateral security has been preserved with the bank for a loan and if the EMI cheque(s) bounces, the bank also has the right to issue a legal notice and can even deduct money from an active account that you may have.

Reasons and Penalties in Cheque Bounce

There are several reasons that can result in a cheque getting bounced or dishonored. These are:

1. Insufficiency of funds

2. Presenting of the cheque after 3 months

3. Overwriting or alterations in the cheque

4. Mismatch of the account number

5. Crossed Account

6. Closed Account

7. Death, insolvency, or insanity of the customer

8. Stopping of payment

9. Mismatch of signature, etc.

However, for cheque bounce to be an offense under the Negotiable Instruments Act, 1881, the cheque must have been returned by the bank for the following reasons:

1. Insufficiency of funds in the bank account

2. The amount stated on the cheque exceeds the amount to be paid in agreement with the bank

3. The issuer of the cheque instructs the bank to stop the cheque payment

Penalties

As stated earlier, punishment for cheque bounce is a criminal offense under The Negotiable Instruments Act, 1881 (Section 138):

1. Imprisonment up to 2 years

2. Fine which may be extended to double the amount on the cheque, or

3. Both of the above

Legal Remedies Available

If the cheque has been issued for the discharge of a debt or liability and was submitted to the bank within 3 months from when it was issued/drawn, and if this cheque has been bounced, one should send a legal notice (to the issuer) demanding the amount to be paid to the receiver of the cheque. Even if after the notice has been sent to the issuer, he/she fails to pay the amount, the payee/receiver of the cheque should file a complaint in a Court of appropriate jurisdiction with the help of a cheque bounce lawyer within a stipulated time period of 30 days.

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Why do you need a lawyer for a cheque bounce case?

A good  cheque bounce lawyer  is experienced in such matters and can navigate better for you. He/she will ensure you are on the right path for the best possible outcome.  You can also use LawRato's  Free Legal Advice  service to get free advice on your legal issue from expert cheque bounce lawyers.

Advocate Chikirsha Mohanty

Greater Kailash - 1, Delhi
5 years

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