When a cheque is returned unpaid by a bank, the bank may levy a cheque return charge on the account holder. The charge is generally treated as a banking service fee and is separate from any legal consequences that may arise from cheque dishonour.
A cheque can be returned for several reasons, including insufficient funds, signature-related issues, account restrictions, technical defects or other reasons mentioned in the bank’s return memo.
The amount charged is not the same across all banks. It can depend on the type of account, whether the cheque was issued or deposited by the customer, the reason for return and the applicable schedule of charges.
Cheque Bounce Charges of Major Banks
The following examples are taken from publicly available bank schedules. Since banks maintain different tariffs for different products and account categories, these figures should be treated as illustrative rather than a universal charge applicable to every customer.
| Bank | Transaction / Return Type | Charge Mentioned in Published Schedule |
|---|---|---|
| State Bank of India (SBI) | Cheque drawn on SBI returned for insufficient funds – Personal Banking/TBU | ₹500 + GST |
| SBI | Cheque deposited with SBI and returned unpaid, up to ₹1 lakh | ₹150 + GST |
| SBI | Cheque deposited with SBI and returned unpaid, above ₹1 lakh | ₹250 + GST |
| HDFC Bank | Cheque deposited and returned unpaid | ₹200 per instrument in the applicable schedule |
| Axis Bank | Certain current-account categories – inward cheque return | ₹550 for first two returns; ₹750 from third return onwards |
| Axis Bank | Certain current-account categories – outward cheque return | ₹50 for first return; ₹100 from second return onwards |
SBI’s published service-charge schedule specifies ₹500 + GST for personal banking and TBU customers where a cheque drawn on SBI is returned for insufficient funds. It also lists ₹150 + GST for deposited cheques up to ₹1 lakh and ₹250 + GST for deposited cheques above ₹1 lakh that are returned unpaid.
Axis Bank’s published schedule for a particular Current Account Normal category, effective from October 1, 2025, lists ₹550 for the first two inward returns and ₹750 from the third return onwards. The same schedule lists ₹50 for the first outward return and ₹100 from the second return onwards.
Axis Bank also publishes different charges for other account categories. For example, its Super Saver schedule lists ₹500 for a cheque returned when issued by the customer and ₹100 for a cheque deposited by the customer and returned unpaid.
These differences demonstrate why there is no single cheque bounce charge applicable to every customer of a particular bank.
Why Do Cheque Bounce Charges Differ Between Banks?
Cheque return charges can vary because banks classify transactions according to their account and service structure.
The applicable charge may depend on:
- Savings or current account
- Personal or business account
- Inward or outward cheque return
- Financial or technical reason for return
- Number of cheque returns
- Local or outstation collection
- Specific banking product
- Applicable service-charge schedule
For example, SBI separately identifies charges for cheques drawn on the bank and cheques deposited with the bank but returned by another bank.
Bank Charges and Section 138 Proceedings Are Different
A cheque bounce charge imposed by a bank is different from legal proceedings arising from cheque dishonour.
Where the statutory requirements are satisfied, dishonour of a cheque issued towards a legally enforceable debt or liability can potentially result in proceedings under Section 138 of the Negotiable Instruments Act, 1881.
The bank may separately debit a cheque-return charge from the customer’s account. Paying this bank charge does not automatically mean that the underlying debt has been paid or that any statutory liability arising from the dishonoured cheque has been resolved.
A cheque dishonour matter therefore needs to be considered on two separate levels:
- Banking consequences – cheque return charges imposed under the applicable bank tariff.
- Legal consequences – potential proceedings where the requirements of the Negotiable Instruments Act are fulfilled.
What Happens After a Cheque Is Returned Unpaid?
When a cheque is dishonoured, the bank generally issues a cheque return memo stating the reason for the return.
The parties should preserve documents such as:
- Original cheque
- Cheque return memo
- Bank statement
- Deposit receipt
- Invoice or agreement relating to the transaction
- Payment records
- Relevant correspondence
- Legal notice, where applicable
The return memo can be important because it records the reason given by the bank for dishonouring the cheque.
If you are the drawer, it is important to identify why the cheque was returned and address the underlying payment obligation.
If you are the payee, the statutory timelines applicable to cheque dishonour proceedings should be considered carefully before taking legal action.
Frequently Asked Questions
No. Banks have their own schedules of charges, and the amount can also vary according to the account type and nature of the cheque return.
Not necessarily. Banks may maintain separate tariffs for different account categories.
Where applicable, GST may be charged in addition to the bank’s service fee. The applicable amount should be checked against the bank’s current tariff.
No. The bank’s return charge is separate from the amount payable under the underlying transaction.
No. Dishonour alone does not automatically establish an offence under Section 138. The statutory requirements must be satisfied.
