What is a “Bad Cheque?
” A “Bad Cheque” is a cheque issued by an accountholder, which is not honored by Bank where the cheque is drawn on. This can be due to a number of reasons. The most common of them being: Balance in the account is not sufficient (Insufficient Funds), Signature of the accountholder on the cheque does not match with Bank records, Stale cheque (presented after 6 months of issuance) or post dated cheque (future date) Amount in words do not tally with the amount in figure “Is writing a Bad Cheque punishable by law?” Yes, if a cheque is returned due to “Insufficient Funds” it is punishable under the prevailing law of Nepal (Negotiable Instrument Act 2034 – clause 107 Ka). Nepal Rastra Bank has issued a separate directive that requires all financial institutions to take specific actions in case of accountholders who issue Bad Cheques. “Why is Laxmi Bank driving the Stop Bad Cheques initiatives?” Apart from legal issues, writing a Bad Cheque not only results in loss of trust between the concern
