Cheque bounce defaulters beware! Never do this or you will lose money
Cheque bounce defaulters should know that this can lead to a huge loss. Also, know that it impacts negatively both the parties involved in the transaction!
Cheque bounce defaulters beware! Whether dealing with money in person or as a businessman, those who handle cheques must be careful about how they deal this critically important piece of paper. Know here that it may cause massive losses to you! So, understand the issue at hand and make sure you never make these mistakes.
The introduction of next generation payment and money exchange services have indubitably become popular nowadays. Government is, no doubt, focusing on the future and is therefore, insisting that digital modes of payment be adopted increasingly and make cashless India a reality. However, cash and cheques are still 2 conventional modes of money exchange that are still popular despite their negative points.
Most of the people still finds drawing a cheque much easier then transferring money online. And this has unfortunately, increased the number of cheque bounce cases in India.
Cheque bounce defaulters should know that this can lead to a huge loss. Also, know that it impacts negatively both the parties involved in the transaction! Yes, that is a big surprise! During a cheque bounce issue, banks penalise both the depositor or payee and the drawer or payer with a fine including GST! Why? For for wasting their time!
Also, the payee has all the rights to sue the payer under section 138 of Negotiable Instruments Act, 1881 under which the perpetrator can be sent in jail for two years or needs to pay twice the amount mentioned on cheque.
So, what should an innocent person who wants to make a payment or transfer money via cheques do to ensure she or he is not penalised? For starters, know these points and do not commit a mistake. The reasons for a cheque bounce default cases:
1. Mismatch of signatures of payer
2. Damaged or poor conditioned cheque
3. Low balance or Insufficient funds in account
4. Overwriting or errors on cheques
5. Date concern or the cheque has expired
6. Mismatch of amount in figures and words
7. Wrong account number mentioned
8. Missing of company's seal on the cheque
9. Cheque is stopped by the payer
10. Amount surpassing the overdraft limit of account
Every commercial bank has its own policy and penalty fines in case of a cheque bounce. Private banks like HDFC and ICICI bank charges Rs 100 to Rs 750 depending upon the cases.
SBI charges Rs 100 to Rs 500 from both payer and payee in case of a cheque bounce, whereas AXIS bank has a fix charge of Rs 500.
Bank Of Baroda on the other hand charges Rs 125 to Rs 750.
Make sure to draw an accurate and neatly signed cheque for everyone. Also, make sure to have sufficient funds in the account or to never cross the overdraft limit of your account.