A cheque returned for the lack of enough funds is very bad. Both banks are put to additional work when a cheque bounces and both the cheque issuer (drawer, in other words) and the payee (one in whose favour the cheque is drawn) are penalised for such returned cheques. The drawee bank (i.e. where the drawer has an account) charges drawer for the outward return cheque and the presenting bank where the cheque was deposited by the payee (i.e. where the payee has the account) charges payee for the inward return cheque. Please refer Procedure for Dishonour of Cheques. 

The charges recovered by the bank from the cheque issuer is absolutely correct because s/he is the sole responsible person for the whole cheque return process. However, this is really very bad for the payee or recipient of the cheque as s/he is in the double loss. S/he fails to get the original amount of the payment written in the cheque as well as incurs a loss in form of bank charges for the bounced cheque. The payee (recipient) is not at any fault and still imposed with the charge that is morally wrong, thus increasing his/her suffering. The charge for cheque inward returns (in the payee account) is about Rs.100 to 125 plus taxes depending upon the bank. Though the amount may look like to be low, however, even a rupee charged without the fault is morally incorrect.

Though section 138 of the Negotiable Instruments Act, 1881 deals with the offence of non-maintenance of sufficient funds to honour a cheque or issuing a cheque whose amount is more than what the bank has agreed to pay from the account. But this process is very cumbersome and not very helpful instantly. This may not help the recipient recover his/her dues or losses. For this, the recipient is required to file another civil petition. This is a summary suit under Order 37 of the Code of Civil Procedure, 1908 and which the recipient sufferer would not get into unless it is about huge amounts.

I, therefore, request the Reserve Bank of India (RBI) with the support of Indian citizens that RBI should direct all the banks for the recovery of charges only from the issuer of the cheque and not from the recipient of the cheque. Both the recipient bank and the drawer bank should be paid charges by the issuer of the cheque and not by the recipient of the bounced cheque.