“Cheque bounce impacts your CIBIL score at large”
Maintaining a clean streak in your financial track is very important and proves to be excellent for your CIBIL score. But normally, people are unaware of the fact that how important the concept of CIBIL score is, and the way it affects your financial bubble. We all have gone through it, and it’s a common notion to not take all finances too seriously. Even if it all seems right, something lacks every time, and this realization hits you when you check your CIBIL score, and guess what? who’s the culprit, you guessed it right, it’s your Cheque bounce, which you didn’t even take seriously at that moment. These factors which you don’t even consider plays a vital role in influencing your CIBIL score. Cheque bounce are in fact, one of the most common financial offenses in India which can lead to humongous consequences for the issuer. The following are the different ways in which bounced Cheque can affect your financial game.
Negative Impact on CIBIL Score
A bounced check can shake the crux of your Cibil score, it has an unimaginable impact on your cibil score, the impact is so irreparable that you could be denied of getting a loan in the future due to a silly fault, the most effective measure you can take before issuing a cheque is, having extra sum of amount in your bank, exceeding your minimum balance even after the cheque is uncashed, you can also try to cultivate the habit of checking you balance before depositing your cheque.
Charges levied by the Bank
If the cheque issued is bounced or the cheque is dishonored due to insufficient balance in the bank account or due to some other technical guidelines such as mismatched signature, the payee and the issuer both are charged by the bank. The check bounce charges varies from bank to bank, generally in the case of Loan repayment the additional charges can surf anywhere between 200 to 700 rupees, plus the penalty fee imposed by the bank.
Filling of common and criminal accusations by the aggrieved party
Consider yourself lucky if you get away with the penalty charge which is imposed due to your cheque bounce, However if you don’t fall in that lot of the lucky ones you can face serious criminal or civil charges by the issuer of the cheque.
“In case, if the cheque dishonor is determined the defaulter can be proven guilty under the Section 138 of Negotiable Instruments Act, 1881″
According to recent RBI guidelines the banks can stop issuing cheque books to all the defaulters who consistently dishonor cheques more that 1 crore rupees. If your EMI cheque dishonors the bank has all the rights to deduct that particular amount from your collateral which you’ve kept with the bank as security.
Different reasons can be a root cause for the cheque dishonor, it can be a technical error such as a signature mismatch or over writing on the cheques. Prioritizing the CIBIL score and taking care of cheque bounce is very important to get access to loan.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. City Credit Management LLP is not liable for any decision arising out of the use of this information.