Resubmitting a Bounced Cheque: Guidelines, Fees, and Validity

Bounced cheques can cause significant inconvenience, but understanding the bank's policies and following proper procedures can help you resolve the issue more efficiently. This guide outlines the steps and considerations involved in resubmitting a bounced cheque, including the reasons why it might bounce, associated fees, policies for resubmission, and the validity period of cheques.

Understanding the Reasons for Bouncing Checks

A cheque may bounce due to various reasons such as insufficient funds in the drawer's account, a stop payment request, or other issues. If the bounce is due to insufficient funds, you should ensure that the account has sufficient funds before attempting to resubmit the cheque. For other reasons, communication with the drawer is crucial to resolve the issue effectively.

Be Aware of Associated Fees

Both the drawer and the recipient may incur fees when dealing with bounced cheques. Banks often charge fees for processing these transactions, and it's important to be aware of these costs. You should also consider the financial impact on the drawer, as they may face overdraft fees or other penalties.

Resubmission Policies Can Vary by Bank

Each bank has its own policies regarding the resubmission of bounced cheques. These policies may include timeframes for resubmission and specific procedures that must be followed. Always check with your specific bank for their policies to ensure compliance and a smooth process.

Communication is Key

Effective communication with the drawer is essential. Ensure that they are aware of the issue and that the account is funded before you resubmit the cheque. This can help in resolving the problem faster and preventing further inconvenience.

Validity Period of Cheques

The validity period of a cheque is three months from the date of issue. For example, if a cheque is dated 01.12.2018, it can be encashed from 01.12.2018 to 28.02.2019. Within this period, you can present the cheque multiple times, but it is advisable not to repeatedly present it. When the drawer consistently fails to provide funds over multiple presentations, it may be wise to take legal action.

Strategies for Handling Repeated Bounces

If a cheque bounces multiple times, it is beneficial to communicate with the drawer promptly to resolve the issue. However, if a drawer fails to fulfill their commitment multiple times, filing a case against them may be necessary. Typically, after the third or fourth instance of a bounce, there is no guarantee of the drawer's future compliance.

By understanding and following the appropriate guidelines, you can manage bounced cheques more effectively and avoid unnecessary financial burdens.