Does a cheque bounce impact cibil


#1

Does a cheque bounce impact cibil?


#2

Yes every cheque bounce will dent your credit score negatively. You will also be liable to pay a fine to the concerned bank. Now if your cheque payment was for some loan EMI or mutual fund payment etc you will have to pay a further associated late payment fee.


#3

Where does one file a cheque bounce case?


#4

As per the Negotiable Instruments (Amendment) Act, 2015 you can file the civil or criminal case against the issuer of the cheque locally at the place where you presented the cheque for
clearance.


#5

Hi Dhyan,

A bounced cheque is a cheque where the payment amount stated on it is not made and it is dishonoured. This will impact your Credit Score.

A cheque can bounce for several reasons which include insufficient funds, a mismatch in the signature, stale cheques, or if there are corrections in the cheque without authentication. The bank collects a penalty from the defaulter when a cheque bounces.

The important point here is that when a cheque bounces, it is a criminal offence in India. Therefore, under the Negotiable Instruments Act, 1881, the issuer of a bounced cheque can be punished with a fine and/or a jail term.

Almost every bank gives you a ‘cheque return memo’ along with the returned cheque stating the reason for the bounce. If you hold the cheque, you can inform the drawer about this and ask if it can be presented again to the bank within the 3 months period. However, this is not necessary.

If you want, you can send a legal notice to the defaulter within a period of 30 days from receiving the cheque return memo. The notice should contain all necessary facts of the matter, including the details of when the cheque was dishonoured. It is best to get this vetted by a lawyer just to ensure that all the necessary information is contained in the notice. The defaulter needs to make a fresh payment within a period of 15 days from the receipt of this notice.

However, if he/she still doesn’t make the payment within this time period, then you can file a complaint in the magistrate court. This case should be filed within a maximum period of 1 month from the date of expiry of the 15 days’ time period.
Remember, the complaint should be filed within the time frame specified. If this is not done, then the case will become time-barred and will not be entertained. When your case comes for hearing, the defaulter can be punished with a jail term of two years and/or a penalty which can be up to twice the cheque amount. The defaulter can appeal against the order within a period of 1 month of judgement. Want to check your Credit Score? Click here.

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Cheers,
BB Expert