Central govt mulls over auto-debiting other A/Cs
Many suggestions were made at a high-level meeting recently called by Finance Ministry
image for illustrative purpose
New Delhi: The Union Finance Ministry is mulling several steps like dipping into other accounts of a cheque issuer and prohibition of opening of new accounts of offenders to effectively deal with cheque bounce cases which are clogging the legal system.
Many suggestions were made at a high-level meeting recently called by the ministry to deal with the high incidence of cheque bounce cases. Some of the steps suggested before taking legal recourse included debiting another accounts of the cheque issuer if his or her account is short of funds to honour the instrument, sources said.
The other suggestions were treating cheque bounce as default of loan and thus reporting it to credit information companies for necessary downgrade of score, the sources said, adding a proper legal view would be taken before these suggestions are accepted. If these suggestions are implemented, it would help enforce cheque honouring by the payer without the matter going to court and also compel him/her to make payment by creating a deterrent through technology.
These measures would help promote ease of doing business and dissuade people from wilfully indulging in 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. Standard Operating Procedure (SOP) for auto-debit and other suggestions would be required. Section 138 of the Negotiable Instruments Act, 1881 deals with dishonour of cheque due to insufficiency of funds in the account.
A complaint for dishonour of cheque under Section 138 of the Act can be filed in the court situated at a place where the bank of the payee is located. It is a punishable offence with a fine which can extend to twice the amount of the cheque or imprisonment for a term not more than two years or both.
