What are cheque bounce charges by banks?

Answer

A:

Cheque bounce charges are the penalty fees imposed by banks when a cheque is dishonoured due to reasons such as insufficient funds, account closure, signature mismatch, or stop payment instructions. Both the drawer (issuer of the cheque) and sometimes the payee (receiver) may have to bear these charges, depending on their bank’s policy.

1. Drawer’s Bank (Issuer of Cheque)

   • Most banks charge between ₹150 to ₹750 per bounced cheque, depending on the account type (savings or current account).

   • Some banks impose higher charges for corporate or current accounts compared to savings accounts.

2. Payee’s Bank (Receiver of Cheque)

   • If the cheque deposited is dishonoured, the payee’s bank may also levy a return fee, usually between ₹50 to ₹200.

3. Repeated Dishonour

   • Frequent cheque bounces may attract higher penalty slabs.

   • Banks may even restrict cheque book facility for habitual defaulters.

• SBI (State Bank of India): Around ₹150 to ₹350 per cheque return.

• HDFC Bank: ₹200 to ₹500 depending on account type.

• ICICI Bank: ₹350 for each returned cheque.

• Axis Bank: ₹300 to ₹500 depending on the case.

(Charges vary by account type, branch, and RBI or bank circulars – customers should check with their specific bank.)

• Legal Expenses: If the payee initiates a case under Section 138 of the NI Act, the drawer may face legal costs and penalties.

• Credit Impact: If the bounced cheque was for a loan EMI or credit card bill, it may lower the drawer’s CIBIL score.

Cheque bounce charges by banks in India usually range from ₹150 to ₹750 for the drawer and ₹50 to ₹200 for the payee, depending on the bank. Repeated cheque dishonours not only increase charges but may also lead to loss of cheque book privileges, legal action, and damage to credit history.