Notice of Dishonored Check

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Commonly Asked Questions about Notice of Dishonored Check

What does it mean when a check is dishonored?

Dishonored checks are items deposited at a depository bank but are returned either: Due to insufficient funds in the accounts the checks are drawn. For other reasons that prevent the bank from honoring the checks.

What happens if my cheque is dishonoured?

The payee may choose to prosecute the payer or allow the payer to re-issue a cheque within three months. The payer may end up in jail for up to two years for issuing a dishonoured cheque. Apart from this, banks also charge penalty for dishonour of cheque. The penalty varies from bank to bank.

How to make a notice of dishonor?

Sir/Madam: You are hereby notified that your (name of bank) Check No. dated , 20, in the amount of P paid to us and acknowledged by our Official Receipt No. dated , 20 has been deposited but was dishonored and returned to us due to .

Do banks return dishonoured cheques?

dishonored cheques should dispatch it immediately to the payees /holders. 2. In relation to cheques presented directly to the paying bank for settlement of transaction by way of transfer between two accounts within the bank, it should return such dishonored cheques to the payees /holders immediately.

What to do if a cheque is dishonoured?

If the amount is not paid, the payee will file a complaint before the Magistrate within 30 days of the expiry of the 15 days notice period. The payee has to appear before the court and give the case details. The Magistrate will issue a summons to the drawer to appear before the court.

Can a bounced cheque be deposited again?

Yes, a cheque can be re-presented for payment after it bounces due to insufficient funds or any other reason. In fact, the Reserve Bank of India has mandated that cheques can be re-presented for payment up to two times within a period of 90 days from the date of the original cheque.

What is a notice of dishonor of a cheque?

A notice of dishonor is a formal notice stating that the bank will not accept a check or draft presented to the institution. A notice of dishonor may be given to the holder or presenter of the instrument. It may also be given to the issuing institution.