What is the cheque book issue policy for frequent dishonour of cheque?

At present, no checkbook would be issued to the account holder, in the event of dishonour of a cheque valuing rupees one crore and above in his account on four occasions during the financial year. Banks were advised to follow above condition for the operation of accounts with cheque facility, in terms of RBI circular DBOD.BC.Leg.No.113/09.12.001/2002-03 dated June 26, 2003,and paragraph 11.4 (i) of RPCD.CO.RRB.BC.No.100/03.05.33/2013-14 dated May 12, 2014.

RBI now reviewed the above instructions and left to the discretion of the individual bank to determine their response to the dishonour of cheques of the account holder. RBI notification dated 5^th August 2016, in this regard, asked the banks that the policy should be transparent, made known to every customer upfront and implemented fairly. The apex bank further directed the banks to put in place appropriate policy approved by their Board to prevent misuse of the cheque drawing facility and to avoid penalising customers for unintended dishonour of cheques.