Have you heard someone saying that their cheque got bounced with a frown on their face. Well, that’s what a cheque bounce brings – a troublesome and embarrassing situation! Let’s teach you all about cheque bounce and how to avoid it.
Cheque Bounce Meaning
A cheque is a written document that an issuer gives to their bank to pay the mentioned amount in this document to the payee. But how does the bank pay this amount? Naturally, from your bank account.
But if there are insufficient funds in your bank account upon which you’ve issued the cheque, the bank will not be able to pay the money to the person in favour of whom you wrote the cheque.
This is the meaning of cheque bounce, i.e. a situation when you cheque is bounced back to you because of insufficient funds in your bank account.
Cheque Bounce Reasons
Although the most common reason of a cheque bounce is insufficient funds in the issuer’s bank account, there are a few more reasons due to which your cheque might get bounced or dishonoured. Let’s look at the reasons:
1. Insufficient Funds in the issuer’s bank account
2. Incorrect name mentioned on the cheque
3. Signature mismatch with the bank’s database
4. Amount mismatch in words and figures
5. Overwriting on the cheque
6. Damaged cheque
7. Stale Cheque (presented 3 months after the date mentioned on the cheque)
Cheque Bounce Charges
Let’s take a look at the cheque bounce charges by the top banks in India:
- SBI Cheque Bounce Charges: Rs 500
- HDFC Cheque Bounce Charges: Rs 550
- PNB Cheque Bounce Charges: Rs 150 – Rs 500
- ICICI Cheque Bounce Charges: Rs 500 (Rs 50 for non-financial reasons)
Cheque Bounce: FAQs
A cheque bounce case may happen due to reasons like insufficient funds, mismatch in signature, incorrect name mentioned and damaged cheque etc.
Bounced cheque charges can vary from Rs 50 (for non-financial reasons) to Rs 500.
Yes, as per the RBI guidelines, banks are supposed to return all the dishonoured cheques to the issuers or payees within the stipulated time while stating the reason for cheque bounce.