What is chq dep ret?

"Ret Dep Item" is the standard shorthand format for a returned deposited item in your checking account. The list of reasons, for which a cheque could be returned unpaid by a bank, is given below (this list is only illustrative and not exhaustive): REASON FOR. Legal Question & Answers in Banking Law in India : CHQ DEP RET- DRAWEE BKS FUND WITH SPONSO means. What is it mean 42 Paper not received cheque returned unpaid? 24,083 Views. CHQ DEP RET- CONNECTIVITY NOT ESTABLISHEDp? I have cheque deposited in HDFC bank which was issued by CAN FIN.

IT CAN BE ASSUMED THAT 10% TO 15% OF THE CHEQUES GET RETURNED IN THE CLEARING SYSTEM.

The reasons for cheque returns are varied and the bank customers would be interested to know the possible cheque return reasons. With the cheque truncation system (CTS) spreading its wings all over the country, new cheque return reasons have been introduced, keeping in view the CTS specialties. If you are facing a cheque return problem in your business then it is recommended to read this post.

In short, these all reasons should know when we get any cheque bounced with a particular reason, therefore, all reason is given below:

Here is the list of cheque return reasons which can be seen when a cheque is present for clearing in any bank branch such as AXIS bank, ICICI bank, BOB, PNB, Kotak, CBI, etc.

01 Funds insufficient

02 Exceeds arrangement

03 Effects not cleared; present again

04 Refer to drawer

05 Kindly contact drawer/drawee bank and please present again

10 Drawer’s signature incomplete

11 Drawer’s signature illegible (अस्पष्ट)

12 Drawer’s signature differs

13 Drawer’s signature required

14 Drawer’s signature is not as per the mandate

15 Drawer‟s signature to operate account not received

16 Drawer‟s authority to operate the account not received

17 Alterations require drawer’s authentication (Under CTS the only alteration in date is permitted, in case of any alteration, the cheque will be returned)

20 Payment stopped by drawer

21 Payment stopped by attachment order

22 Payment stopped by court order

23 Withdrawal stopped owing to the death of account holder

24 Withdrawal stopped owing to the lunacy of the account holder

25 Withdrawal stopped owing to the insolvency of the account holder

30 Instrument post-dated

31 Instrument out-dated

32 Instrument updated / without proper date (Date column on the cheque is blank)

33 Instrument mutilated; requires a bank’s guarantee

34 Cheque irregularly drawn / amount in words and figures differ

35 Clearing House stamp/date required

36 Wrongly delivered / not drawn on us

37 Present in the proper zone

38 The instrument contains extraneous matter

39 Image not clear; present again with paper (Exclusive CTS return reason)

40 Present with the document (Exclusive CTS return reason)

41 An item listed twice (presenting bank has presented the same instrument twice, this happens when first the cheque is presented via MICR and the second time via CTS or vice-versa)

42 Paper not received (Exclusive CTS return reason)

50 Account closed

51 Account transferred to another branch

52 No such account (this happens, when the account number is printed, and the account number was written by hand illegible)

53 Title of account required

54 Title of account wrong/incomplete

55 Account blocked (situation covered in 21-25)

60 Crossed to two banks

61 Crossing stamp not canceled

62 Clearing stamp not canceled

63 Instrument specially crossed to another bank

64 Amount in protective crossing incorrect

65 Amount in protective crossing required / illegible

66 Payee‘s endorsement required

67 Payee‟s endorsement irregular / requires collecting bank’s confirmation

68 Endorsement by mark/thumb impression requires attestation by Magistrate with seal

70 Advice not received

71 Amount / Name differs in advice

72 Drawee bank’s fund with the sponsor bank insufficient

73 Payee’s separate discharge to the bank required

74 Not payable till 1st proximo

75 Pay order/cheque requires a countersignature

76 Required information not legible/correct

80 Bank’s certificate ambiguous/incomplete/required

81 Draft lost by issuing office; confirmation required from issuing office

82 Bank /Branch blocked

83 Digital Certificate validation failure

84 Other reasons-connectivity failures

85 Alterations on instrument-Other than “Date” filed (Alteration/correction on instruments are prohibited under Cheque Truncation System. Return reason code applicable to instruments presented in CTS)

86 Fake / Forged / Stolen- draft/cheque/cash order/interest warrant/dividend warrant

87 „Payee’s a/c Credited’ – Stamp required 88 Other reasons (Please specify)

88 Other reason (plz specify)

92 Bank excluded

These are the reasons, There customers are not at fault when it happens as per source Sbi faq

Why does a cheque bounce?

To begin with, let’s see what a cheque means. We will later elaborate on what cheque bounce means.

A cheque is a negotiable instrument used by banking institutions to transfer money in a physical form or to execute inter-account transfers in a stable and secure environment. It is one of the safest ways of operating the financial transactions of business since an entry against every cheque is recorded by the bank which can be used to track when necessary.

Now since we know what a cheque is, let’s find out what is cheque bounce.

A cheque bounce is usually a term used to describe the unsuccessful processing of a dispensed cheque due to several reasons. Among cheque bounce reasons, one of the main reasons why a cheque bounces is insufficient funds in the issuer’s bank account. When there are inadequate or no funds in the account, the cheque that has been issued is returned. It is termed as bounced cheque .

What if a cheque bounces?

Cheque bounce in India can be considered illegal and a criminal offence. The issuer may be liable to pay penalties. In some cases, legal action taken may be (by the bank) towards the issuer.

So now you know the answer to ‘what if your cheque bounces?’

Let’s take a look at Reasons for a cheque bounce in India.

Although, there are several cheque bounce reasons to be considered such as incorrect date mentioned on the cheque, signature mismatch, mismatch of the amount and figures, damaged cheque, overwriting of the cheque, etc. The principal reason for a cheque bounce is insufficient funds.

First, if your account lacks appropriate funds from which the cheque has been issued, there are high chances that the cheque will bounce.

In the second case of cheque bounce, you receive a cheque from an account which has minimal to no funds. When this happens, the bank will not process the cheque.

Both these are scenarios of a bounced cheque. Nominal penalty to both parties will apply in either of the above situations. Thus, one must maintain sufficient funds in the account to prevent a cheque bounce.

A bounced cheque fee varies from bank to bank, and various penalties plus service tax and cess are charged over and above the fines.

Let’s take for example HDFC Bank, for every cheque bounce, HDFC Bank levies a fine of Rs. 550 plus Service Tax.

To avoid these fines, you can set a future date on the cheque and ensure that there are adequate funds in the account to prevent a cheque bounce.

However, another option would be to carry out your transaction via online payments or NetBanking. Online funds transfers save a lot in terms of penalties and fines, and they’re also convenient. You can set up an automatic payment facility and no follows would be required. Additionally, online payments can be carried out 24*7 which saves you time as well as paper; all your transactions are available at a click of a button when you log into your NetBanking account.

Cheques are one of the most convenient and widely used negotiable instruments used for transferring money from one account to another. However, in reality, the process is not as simple as it is depicted to be. The cheque that is deposited does not always get encashed. There are various reasons behind this such as the expiry of the cheque or insufficiency of funds. Under such circumstances, it is said that the cheque is dishonored or bounced. This results in dire consequences such as fines and penalties being imposed or even might result in imprisonment on the issuer.

A cheque is a written instrument wherein a commitment is made by the payer for a specific amount of money. When the bank does not transfer the requested amount from the payer’s account to the payee for some reason, the cheque is said to have bounced or dishonored. When a cheque is dishonored, the most natural cause of action that would arise is, the banks levying charges for the same.

A cheque may be returned for a variety of reasons as stated previously, the prevalent one being, the insufficiency of funds. There could also be other “light-weighted” reasons such as the signature on the cheque not matching the account holder’s signature or the numbers in the figure varying from the number written in words, erroneous account number, issuing disfigured or damaged cheques, etc.

In the case of insufficiency of funds, not only the defaulter but also the payee is penalized with the cheque return charges. This fee is called the NSF fee or Non-Sufficient Fund fee and is levied when the bank decides to dishonor the cheque. Banks are put to additional work when a cheque bounces and it is for this reason that both the cheque issuer (drawer) and the payee (one in whose favor the cheque is drawn) are penalized for such returned cheques. The drawee bank (where the drawer has an account) charges the drawer for the outward return cheque and the presenting bank where the cheque was deposited by the payee (where the payee has account) charges the payee for the inward return cheque.  These charges thus inflicted vary across the banks and are dependent on the reasons and nature of the cheque bounce along with the type of account. It is important to note that these charges also attract GST.

The charges can be higher in premium accounts. Some banks have higher penalty charges for exceeding a certain number of misses in a period. The charges for the lack of sufficient funds in the account are applicable on payment through electronic funds transfer as well. A few banks do charge a small fee on cheques drawn on them if they are returned for technical reasons other than system or power failure. Others may not charge for cheques returned due to technical reasons.

The cheque returns charges for some of the banks have been depicted below. The charges can be found by visiting the official website of the banks.

When an individual is on the receiving end of the bounced cheque, legal measures can be taken for recovering the dues. However, cheques that are deposited for the purposes of gifting cannot be contested.

When a cheque bounce ensues, the financial credit history of the issuer gets hit. Further, a single incident of cheque bounce is enough to affect one’s CIBIL (Credit Information Bureau India Limited) score, which is a numeric representation of one’s credit history. Shockingly, even the loans of the individual can get rejected. Therefore, to hold the position of the CIBIL score one needs to ensure that the cheques are never defiled and that the account possesses enough balance.

RBI (Reserve Bank of India) has also instructed the banks to lay a constraint on the issuance of cheques to customers who recurrently sign checks without sufficient balance in their account. In circumstances wherein a customer has opted for a loan in the bank and the EMI cheque bounces, the bank has the right to forward a legal notice to the defaulter and even deduct money from the defaulter’s active account.

A cheque is a financial document that orders a bank to pay a particular amount of money from a person’s account to another individual’s or company’s account in whose name the cheque has been made or issued. The cheque is utilised to make safe, secure, and convenient payments. It serves as a secure option since hard cash is not involved during the transfer process; hence the fear of loss or theft is minimised.

A cheque may be issued against a current account or a savings account. Every bank cheque has a cheque number, MICR and IFSC code. Under this mode of fund transfer, there are three parties involved in the on-track movement of money through a written paper source.

There are three parties to cheque –

Apart from the above mentioned parties, there are two more parties to a cheque:

Sometimes, the drawer and the payee can be the same person, when the drawer writes a self-cheque.

Read in detail: Types of Cheque

To cancel cheque leaves, you just need to strike two lines across the cheque and write the word “CANCELLED” across it. You don’t need to sign the cancelled cheque. It only works as proof that you have an account in the bank. There is the account holder’s name, branch name and address, account number, and MICR code on the cheque which is enough to submit as proof.

As all the primary details of your bank account are present in a cancelled cheque, it helps a verifier/auditor to confirm these details of yours. Moreover, a Cancelled Cheque doesn’t necessarily require your signature on it, so there aren’t any security issues which you should be concerned about when you submit your bank cheque as proof of your financial identity.

A crossed cheque is any cheque which is crossed with two parallel lines. The lines can be drawn either across the whole cheque or through the top left-hand corner. What does it signify? It simply means that the specific cheque can only be deposited straightway into a bank account and cannot be instantly encashed by a bank or any credit institution. This ensures a level of security to the payer since it requires the funds to be handled through a collecting bank.

Cross cheque focuses on the instruction given by the drawer (maker) of the particular cheque to the drawee bank. This instruction demands to pay the cheque at the counter of the bank, but with a strict direction to pay it to a person who offers it through a banker. What is the purpose of crossing? Crossing makes it possible to trace the person to whom the amount/payment has been made. In India, there are various crossing tools to safeguard cheque payments such as:

General Crossing

This type of cheque crossing requires two parallel transverse lines. There isn’t any restriction on putting these parallel lines on a specific area on the cheque, but they can be drawn anywhere. Usually, it is advisable to put it on the top left corner of the cheque. The usefulness or significance of this crossing is that the cheque should essentially be paid only to the banker.

Special Crossing

Special Crossing cheque does require the name of the banker. The effect of this type of crossing is that the cheque should be funded only to the banker to whom it is crossed. It is a reminder to all the people that a special crossing cannot be changed into a general crossing.

Not Negotiable Crossing

In this type of cheque crossing variety, the paper document needs to contain the words ‘not negotiable’. Moreover, the cheque can be crossed specially or generally.  What is the effect of this crossing?  The cheque remains non-negotiable (transferrable) as well as the title of the transferee will not be better than the title of the transferor.

Uncrossing a Cheque

A cheque leaf, commonly known as a Cheque, is a tool which is used to transfer funds from one bank account to another. A bundle of cheque leaves attached is a cheque book which is provided by the bank to its customers.

There are various ways in which you can apply for a new chequebook using any of the following means given below:

Different banks across India have stated specific guidelines regarding the proper filling of cheques. It is important to go through your bank’s guidelines for acquiring proper awareness. Further, do not miss to check out conditions for cheque bounce; this would make you more alert during the cheque filling process.

A bank can refuse to make the payment mentioned on a cheque due to various reasons. Some of them are mentioned as follows:

MICR or Magnetic Ink Character Recognition is a 9-digit code generally printed at the bottom of the cheque leaf. The first three digits represent the city, the next three the bank and the last three the particular branch code. The MICR code on cheque helps in easier identification of cheques, eliminate payment errors and process cheque payments faster.

Q. What is the punishment and penalty related to a dishonoured cheque? Ans. The court, after receiving the complaint along with relevant documents, will start the case. If the drawer is found guilty, as per Section 138 of the Negotiable Instruments Act, 1881, he/she can be sent to the jail for up to two years and/or pay the penalty of amount twice the cheque amount. In addition, the banks also have the right to close the guilty person’s account (on repeated bounce cheque offence) or stop their cheque book facility. The bank may also charge a penalty to both the drawer and the payee for the inconvenience, extra paperwork and wasting the bank’s time.

Q. What happens if the payee takes legal action against the drawer? Ans. If the payee decides to proceed legally, a chance is given to the drawer to pay the cheque amount immediately. For this, the payee is supposed to send a notice to the drawer within 30 days from the date the payee receives the “Cheque Return Memo” from the bank. The notice should state that the cheque amount must be paid to the payee within 15 days of receiving the notice.

If the drawer still fails to pay money to the payee within 30 days of receiving the notice, the payee has full right to file a criminal report against the drawer as per Section 138 of the Negotiable Instruments Act, 1881. But the complaint or report should be registered in a magistrate’s court within a month of the expiry of the notice period.

Q. What happens if a cheque is dishonoured by the bank? Ans. As per the Negotiable Instruments Act, 1881, if a cheque is dishonoured by the bank due to insufficient money in the bank account of the drawer then it is a criminal offence. In such a case, the drawee bank issues a ‘Cheque Return Memo’ to the payee’s bank mentioning the reason for non-payment. In turn, the payee’s bank handovers the bounced cheque and the memo to the payee.

Now the payee has the choice to either re-present the cheque within three months from the date mentioned on it or legally prosecute the drawer. If the payee proceeds with the former choice and if even the second time, the drawer fails to make the payment then the payee has the right to sue the drawer. However, the payee can sue the drawer only if the amount mentioned on the dishonoured cheque is to pay off a debt or any other liability of the drawer towards the payee. The drawer cannot be sued in such cases in which the cheque was handed out as a gift or to lend a loan to the payee or for unlawful purposes.

Q. What is the difference between depositing and cashing a cheque? Ans.

Q. Is a cheque payable outside of banking hours? Ans. No, a bank is liable to make the payment only during working hours.

Q. Can banks refuse to make a payment? Ans. Yes, the bank can refuse to make a payment in the following circumstances: If the cheque is without a date In case more than 3 months have elapsed since the issue of the cheque In case a post-dated cheque is presented before its date

Q. What is a cheque number? Ans. It is a 6-digit unique number printed on each cheque leaf.