Government mulls debits in other accounts due to rise in cheque bounce cases…

Rise in check bounce Cases –

The cheque bounce Cases have been on rising which is clogging the legal system. When an issuer presents a cheque to the bank for payment, and it is returned unpaid by the bank due to insufficient funds, the cheque is said to have bounced. Several suggestions are made to deal with the high incidence of cheque bounce cases. The finance ministry is taking efforts to restrain such cases. They are mulling several steps like dipping into other accounts of a cheque issuer and prohibition of the opening of new accounts of offenders.

Suggestions and implementation –

Many suggestions were offered at a high-level meeting recently called by the ministry to curb such cases of check bounce. Some of the steps suggested before taking legal recourse included debiting other accounts of the cheque issuer if his or her account is short of funds to honor the instrument. Some more suggestions included treating cheque bounce as the default of the loan and thus reporting it to credit information companies for necessary downgrade of the score. Also adding a proper legal view would be taken before these suggestions are accepted. The only role left is implementing the suggestions which if done would help enforce cheque honoring by the payer without the matter going to court and also compel him/her to make payment by creating a deterrent through technology.

Executing the Suggestions –

Execution of such suggestions would help promote ease of doing business and dissuade people from wilfully indulging in the issuance of cheques even though their accounts have insufficient funds. Proposed steps could be implemented through the integration of data across the banks, sources said. The various steps to be taken include dipping into other accounts of a cheque issuer, Barring the opening of new accounts of offenders, Debiting another account of the cheque issuer if the account is short of funds, and treating cheque bounce as the default of the loan and reporting it to credit information firms. These measures would help in controlling the situation. The proposed steps could be implemented through the integration of data across the banks, sources said. Standard operating procedures for auto-debit and other suggestions will be needed.

Need for strict Rules –

The Supreme Court had constituted a committee to suggest steps to be taken for the early disposal of about 35 lakh pending cases across the country. During the hearing, the Centre had “in principle accepted” the need for creating additional courts to deal with such cases.

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