Guidelines on return/ despatch of dishonoured cheques?

In terms of RBI guidelines the paying bank should return dishonoured cheques presented through clearing houses strictly as per the return discipline prescribed for respective clearing house in terms of Uniform Regulations And Rules for Bankers’ Clearing Houses.

According to RBI circular DBOD.No.BC.74/09.07.001/91-92 dated 28th January 1992, RBI had advised all the banks implement the recommendation of the Goiporia Committee that dishonoured instruments are returned / despatched to the customer promptly without delay, in any case within 24 hours.

(i) The collecting bank on receipt of such dishonoured cheques through clearing should despatch it immediately to the payees / holders.

(ii) In case the cheques presented at the counter of paying bank for settlement of transaction by way of transfer between two accounts with that bank, it should return such dishonoured cheques to payees/ holders immediately.

(iii) Cheques dishonoured for insufficient funds in the account, cheque should be returned along with a memo indicating therein the reason for dishonour as “insufficient funds.”

The information on each dishonoured cheque for amount of Rs.1 crore and above should be made part of bank’s MIS on constituents and concerned branches should report such data to their respective controlling office / Head Office. Data in respect of cheques drawn in favour of stock exchanges and dishonoured should be consolidated separately by banks irrespective of the value of such cheques as a part of their MIS relating to broker entities, and be reported to their respective Head Offices / Central Offices.

Earlier banks were not issuing cheque book 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, as per RBI guidelines. RBI changed 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 5th August 2016, in this regard, asked the banks that the policy should be transparent, made known to every customer upfront and implemented fairly. 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.

The ‘Boards’ of the banks are required to initiate preventive measures and checks to prevent any scope for collusion of the staff of the bank or any other person, with the drawer of the cheque for causing delay in or withholding the communication of the fact of dishonour of the cheque to the payee/ holder or the return of such dishonoured cheque to him. Banks should also lay down requisite internal guidelines for their officers and staff and advise them to adhere to such guidelines