Page 49 - Banking Finance October 2019

FEATURE

person. In these cheques, the word "bearer" has to be impact your Cibil score. If the bounced cheque is not credit-
cancelled, and the name of the person who is supposed to related, it will not impact your score, but will still affect your
draw the money is to be mentioned. The bank will release financial credibility," said Sujata Ahlawat, vice-president and
the funds to this specified person upon seeing an ID. head of direct-to-consumer interactive, TransUnion CIBIL,
one of the four credit bureaus in India.
Bearer and order cheques are also known as open cheques
and you can encash them over the counter at any bank Third, if a cheque is bounced wilfully (where there is no
intention to pay or there's an intention to cheat or there
Loose cheque: When you make a new cheque book request, are defaults despite the capacity to repay), the defaulter
it typically takes at least five business days before you receive can be prosecuted. Pratibha Bangera, a Mumbai-based
it. In the interim, if you need to use a cheque urgently, banks lawyer with law firm Top Rite Juris, said, "If the cheque is
issue loose cheques for a fee. For instance, ICICI Bank Ltd dishonoured wilfully, the defaulter can be prosecuted under
charges Rs. 25 per loose cheque leaf. Section 138 of the Negotiable Instruments Act or Sections
417 and 420 of the Indian Penal Code, 1960." The defaulter
Cheque bounce can be punished with a prison term of two years and or has
to pay a fine that is as high as twice the cheque amount.
Cheque transactions in India are governed by the Negotiable
Instruments Act, 1881 along with the Reserve Bank of India. However, the issuer can get another chance by re-
When a cheque is not processed successfully, it is deemed presenting the cheque within three months of the default.
"bounced". The aggrieved person can take the legal route if the cheque
bounces again within 30 days of the cheque return memo,
A cheque can bounce for a number of reasons such as added Bangera. When a cheque bounces, the drawee bank
mismatch in the issuer's signature with the bank's records immediately issues a cheque return memo to the banker of
or insufficient funds. Remember that there are the payee mentioning the reason for non-payment.
consequences to face for a cheque bounce.
According to RBI rules, your bank will stop issuing you a
First, both the issuer and the receiver of the cheque are fined cheque book if you are booked repeatedly for the offence
by their respective banks. The penalty is Rs. 300 and Rs. 100, of cheque bounce. However, RBI states that such action can
respectively, but may vary from bank to bank. Second, a be taken only if cheques valued Rs. 1 crore or above bounce
bounced cheque can hit your credit score. more than four times.

"A cheque bounce will lead to the lender reporting it as non- So is you are still using your cheque book, do it carefully.
payment within the stipulated period, and this will adversely (Source: Livemint)

Fuel prices continue to rise in metro cities

After a steep rise in the last few days, fuel prices again saw up to 7 paise rise across all major metropolitan cities. In
New Delhi, petrol and diesel prices remained unchanged at Rs 74.19 per litre and Rs 67.14 per litre, respectively.

The petrol and diesel prices in the worst-hit Mumbai also saw a rise. Petrol prices have reached 79.85 per litre and
70.44 per litre for diesel in Mumbai. In Kolkata, petrol will cost Rs 76.88 per litre and diesel Rs 69.56 per litre.

Meanwhile, in Chennai, consumers will have to shell out the same amount as on Wednesday, i.e. Rs 77.12 per litre for
petrol and Rs 70.98 a litre for diesel. Also, in Noida, the diesel price soared to Rs 67.46 a litre and petrol price Rs 75.66
per litre.

BANKING FINANCE | OCTOBER | 2019 | 49