What is meant by Dishonour of Cheque?
If a cheque is dishonoured because funds in the payer’s account were insufficient, it is a criminal offence under the Negotiable Instruments Act of 1881. The payer may be prosecuted for issuing a cheque against an account with insufficient funds.
What are the reasons of Dishonour of Cheque?
What are the possible reasons due to which a bank can dishonour a cheque?
- Insufficient funds in the payer’s bank account.
- Signature missing or mismatch.
- Account number mismatch.
- Issue with the date of the cheque.
- Mismatch in the amount in words and numbers.
- Disfigured or damaged cheque.
- Crossing limit of the overdraft.
What is meant by Dishonour charges?
What is a dishonored payment fee? A dishonored payment fee, also known as a returned payment fee, is the charge that a person receives when she attempts to make a payment but doesn’t have enough funds to cover the cost.
Which is a type of Dishonour of Cheque?
Dishonour of cheque by non-payment: A bill of exchange, promissory note, or cheque is considered to be dishonoured by non-payment when the maker of the cheque, drawee of the cheque, or the acceptor of the bill commits default in payment when the party is duly required to pay the bill.
What are the consequences of Dishonour of Cheque?
According to Section 138 of the Act, the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both. If payee decides to proceed legally, then the drawer should be given a chance of repaying the cheque amount immediately.
What are the penalties for Dishonour of Cheque?
What is a Dishonoured Cheque in bank reconciliation?
A dishonoured cheque occurs when the bank refuses to pay the cheque o Because it has been cancelled ->; as the balance of the account on which it is drawn is less than the amount of the cheque.
When can a bank Dishonour customer’s cheque?
If any cheque is presented to the bank for payment after three months from the date mentioned on it, then it is known as a stale cheque. After expiry of that period the cheque will be dishonoured.
Can a bounced cheque be deposited again?
Answer: Yes, you can present the cheque again in the bank for payment, even if it was dishonoured on the first occasion. However, it goes without saying that the cheque can be presented again in the bank only during the period of its validity. Normally, the period of validity of the cheque is 3 months.
Is there any cheque bounce charges?
In a cheque bounce case, the cheque issuer may face imprisonment up to 2 years or monetary penalty under section 138 of the Negotiable Instruments Act. Cheque bounce penalty charges vary from bank to bank ranging from ₹ 50 to up to ₹ 750.