Outlook Money
Cheques are becoming popular increasingly, but a bounced cheque can have various consequences in financial and legal terms.
A cheque bounce is usually due to the lack of sufficient funds in the account to honour the cheque.
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.
The conequences include penalty fees, interest on delayed payments and damage to the reputation.
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.