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RBI Mandates Board Policy for Frequent Cheque Bounces Under ₹1 Crore

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2009-10/213 · issued 09 Nov 2009 · ~1 min read
Quick answerRBI now requires banks to create a Board-approved policy for handling frequent dishonour of cheques below ₹1 crore and ECS mandates. This extends earlier rules for large-value cheques to smaller ones, giving banks flexibility in designing their own approach.

What changed

Previously, RBI had advised specific steps for dealing with frequent dishonour of cheques of ₹1 crore and above. Now, RBI has extended the concern to cheques of value less than ₹1 crore, directing banks to formulate a Board-approved policy for such cases. The policy must also cover frequent dishonour of ECS mandates.

What it means for you

Banks must now formalize their approach to repeat cheque bounces for smaller amounts, which were previously left to individual discretion. This ensures consistent treatment of recalcitrant customers across the banking system. The policy requirement adds a compliance layer but allows banks to tailor actions based on their risk appetite.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

All Scheduled Commercial Banks (excluding RRBs), Bank branches handling cheque clearing and ECS mandates, Customers with history of frequent cheque bounces

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Does this circular apply to Regional Rural Banks?

No, the circular explicitly excludes RRBs from its scope.

What should the Board-approved policy cover?

The policy must address frequent dishonour of cheques below ₹1 crore and also include provisions for frequent dishonour of ECS mandates.

Are the steps for large-value cheques mandatory for smaller cheques?

No, RBI states that it may not be necessary to extend all steps from the earlier circular to smaller cheques. Banks can design their own approach.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1790: DBOD.No.Leg.BC.59/09.07.005/2009-10 — "Dishonour of Cheques - Dealing with Incidents of Frequent Dishonour" dated November 9, 2009”
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/213   DBOD.No.Leg.BC.59 /09.07.005/2009-10 November 9, 2009 All Scheduled Commercial Banks (Excluding RRBs) Dear Sir, Dishonour of Cheques – Dealing with incidents of frequent dishonour Please refer to paragraph 15.4 of our Master Circular DBOD.No.Leg.BC.9/ 09.07.006/2009-10 dated July 1, 2009 on Customer Service wherein banks have been advised to take certain steps for dealing with incidents of frequent dishonour of cheques of Rs. 1 crore and above. 2. In this connection, it may be mentioned that frequent dishonour of cheques of value of less than Rs. 1 crore is also a matter of concern and banks need to take appropriate action in those accounts where such dishonour of cheques occur. Though it may not be necessary to extend all the steps laid down in paragraph 15.4 of our Circular to smaller cheques, banks can have their own approach to deal with recalcitrant customers. Banks are therefore advised to have a Board approved policy for dealing with frequent dishonour of cheques of value of less than Rs. 1 crore.  The policy should also deal with matters relating to frequent dishonour of ECS mandates. Yours faithfully (B. Mahapatra) Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/213 · issued 09 Nov 2009. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5353&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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