Cheque Bounce New Rules: The government has taken cheque bounce issues seriously and made important changes to the Negotiable Instruments Act, 1881.
These changes have come into effect from April 1, 2025. The aim is to stop fraud, improve payment transparency, and speed up complaint resolution.
Let’s understand what the new cheque bounce rules are and how they will affect people.
What changes have been made in the cheque bounce rules?
Now, if someone deliberately causes a cheque to bounce, they will face stricter punishment than before.
In such cases, the person can be sent to jail for up to two years and may also have to pay a fine of up to twice the cheque amount.
Also, cheque bounce cases in court will now be heard faster. The Madras High Court has given special orders to speed up this process.
Earlier, people had one month to file a complaint, but now this time limit has been extended to three months. This will give the complainant more time to present their case properly.
Cheque bounce complaints can now be filed online
Now people can file cheque bounce complaints online, and digital proof will also be accepted. This will make the process easier.
Also, all banks will now follow the same procedure. This means that the same steps will be taken no matter which bank is involved in the cheque bounce.
Banks must now inform both the account holder and the person who was supposed to receive the cheque within 24 hours if the cheque bounces.
They must send this information via SMS and email and clearly mention the reason for the bounce.
If a cheque bounces three times, the account may be frozen
If a person’s cheque bounces three times in a row, the bank can temporarily freeze their account. This step has been taken to maintain discipline in the banking system.
How to avoid cheque bounce issues?
Keep enough money in your account to avoid cheque bounce.
Write the date and the name of the person correctly on the cheque.
Use good quality black or blue ink.
Don’t use torn or damaged cheques.
Always draw two lines on the cheque to mark it as “Account Payee”.
Check your bank statement regularly.
If you expect any delay in cheque payment, inform the other person in advance.
What is the legal punishment for cheque bouncing?
Under Section 138 of the Negotiable Instruments Act, 1881, cheque bounce is a criminal offence.
The punishment includes up to two years in jail, a fine of up to double the cheque amount, court fees, and legal expenses. Banks may also charge a penalty between ₹100 to ₹750.
