What is the meaning of cheque bounce

A cheque bounce, also known as a dishonoured cheque, occurs when a bank refuses to process a cheque and returns it unpaid. This typically happens for various reasons, including:

• Insufficient funds in the issuer's account
• Signature mismatch compared to bank records
• Stale or post-dated cheques
• Overwriting or physical damage to the cheque
• Incorrect or mismatched figures and words

In India, a cheque bounce due to insufficient funds is a criminal offence under Section 138 of the Negotiable Instruments Act, 1881, and can lead to penalties, bank charges, and legal action.