Check Bounce Rule: If you are paying through check also then some things should be kept in mind. Otherwise, if the check bounces, there can be jail along with fine. Check bounce is considered a legal offense in the language of the court. In this, a provision has been made for punishment under the Negotiable Instruments Act, 1881. The bank dishonors the check for some reason and the payment is not made. So it is called check bounce. The main reason for this is not having balance in the account. Moreover, the bank dishonours the check even if there is a difference in the signature of the person.
Check bounces due to these reasons
- Insufficient funds in check payee’s bank account
- signature does not match
- account number does not match
- problem with check date
- Inequality of amount between words and numbers
- torn check
- If overdraft limit is exceeded
What happens after a check bounces?
When a check bounces, the drawer has to inform about it. After this he has to pay within 1 month. Failing to do so, a legal notice is sent to the person. If no response is received after 15 days, a case is registered under Section 138 of the Negotiable Instruments Act, 1881. Under the Negotiable Instruments Act, 1881, a person can be prosecuted and the person issuing the check can be imprisoned for up to two years.
What is the check period?
Cheques, bank drafts are currently valid for six months from the date of their issue.
Check is valid only for 6 months?
It is normal banking practice to dishonor a check older than six months. This method is for the protection of the check writer, as there is a possibility that the payment may be made through some other means or the check may be lost or stolen.
Keep these things in mind before cashing a check
When you give a check to someone, make sure you have money in your account.
The check must be encashed by the payee within three months.
When paying someone by cheque, avoid giving spaces between the words and numbers relating to the name and amount.
When you sign a bank check, get the official signature from the bank.
While paying someone through bank cheque, remember the check details like check number, account name, amount and date.
Issue permanent account payee cheque.
Fill in the information on the check carefully and accurately.