Cheque bounce is a grave offense and leads to grievous financial consequences for the issuer. In this article, we will look at all the ways a cheque bounce can affect you and the impact it has on your CIBIL score.
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A cheque bounce happens when a person tries to deposit a cheque but their account does not have enough money to cover the amount of the cheque.
One cause of a bounced cheque is a lack of funds in the account of the sender. A cheque bounce can also happen due to a signature mismatch, wrong date, overwriting, or other technical issues.
Banks often charge fees for these dishonored checks.
Cheque bounce does not directly affect the CIBIL score.
CIBIL score largely depends on your ability to repay your loans on time. Hence, even if a cheque you have issued bounces, your CIBIL score does not decrease if you are repaying your installments within the due date.
However, if you default on your payments or delay them, and issue a dishonored cheque, your CIBIL score will take a plunge.
Additionally, you can be charged with a criminal case for the bounced cheque.
It is illegal to deposit a bad cheque. The severity of this offense varies based on the amount involved.
Defaulters and payees both incur charges when a check bounces due to insufficient funds or a signature mismatch. Moreover, if the bounced check was against a loan repayment, you would be charged late fees in addition to penalty fees.
Cheque bounce is considered a criminal offense in India and you could face up to 2 years of jail time and a penalty. However, you will be given sufficient time to rectify your mistake.
Only when you do not pay the necessary amount to the payee in the stipulated time provided, can they approach the court and file a case against you.
In case you have already written a cheque in the name of the payee but there are insufficient funds in your bank account, inform the payee beforehand or cancel the cheque with the bank to avoid the cheque being dishonored.
You could also add more funds to your account before the cheque date to ensure a smooth cheque settlement.
A bad cheque can lead to severe consequences. Apart from impacting your credit score, it will also lead to criminal charges against you. Make sure you have sufficient balance in your account before issuing a cheque to avoid any inconvenience.
No. CIBIL does not directly depend on cheque bounce.
Cheque bounce does not directly impact CIBIL score. As long as you pay your bills on time, your CIBIL score will not decrease.
No. A cheque bounce will not appear in your CIBIL report.
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