Cheque Bounce Consequences: All You Need To Know

Outlook Money

Cheques

Cheques are becoming popular increasingly, but a bounced cheque can have various consequences in financial and legal terms.

Cheque

Causes of Cheque Bounce

A cheque bounce is usually due to the lack of sufficient funds in the account to honour the cheque. 

Cheque Bounce

Other causes

Other reasons for a cheque bounce include mismatched signatures, misspelt or missing information such as the name of the payee, date, or amount, and post-dated or pre-dated cheques.

Other causes

Consequences 

The conequences include penalty fees, interest on delayed payments and damage to the reputation. 

Consequences

Legal consequences

Depending on what the amount is, a cheque bounce can have legal consequences too under the Negotiable Instruments Act. It can even lead to imprisonment for two years. 

consquences

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