RBI cracks down on unfair cheque return charges and delays
Current · Source: Reserve Bank of India · RBI/2012-13/493 · issued 07 May 2013 · ~2 min read
Quick answerRBI mandates banks to levy cheque return charges only when the customer is at fault and to re-present technical return cheques within 24 hours (excluding holidays), with customer notification via SMS or email.
The rule, in the simplest words
Banks can only charge you for a bounced cheque if it's your fault (like not having enough money in your account).
If a cheque bounces because of a small mistake (like a signature mismatch or date error), the bank must try to send it again within 24 hours (not counting holidays).
The bank must tell you by SMS or email whenever they re-send a cheque that bounced for a small reason.
Banks cannot charge you for a bounced cheque if the mistake was not yours (like the other bank's error or a technical glitch).
How it plays out — a real example
Ravi, a payments & clearing officer in Indore, receives a cheque from a customer that bounces because the paying bank's system had a glitch. Following the new rule, Ravi does not charge the customer any fee, and he re-presents the cheque in the next clearing cycle within 24 hours, sending an SMS alert to the customer about the re-presentation.
What changed
RBI observed banks charging customers for cheque returns even when the customer was not at fault, and delaying re-presentation of cheques returned for technical reasons. To fix this, RBI now requires banks to levy return charges only when the customer is responsible, and to re-present eligible cheques in the next clearing cycle within 24 hours (excluding holidays), notifying customers via SMS or email.
What it means for you
Banks must immediately revise their Cheque Collection Policies to align with these rules, ensuring fair charging and faster re-presentation. This reduces customer grievances and operational risks, but requires system updates for timely re-presentation and notification. Non-compliance could invite regulatory action under the Payment and Settlement Systems Act.
What you must do
Update your Cheque Collection Policy to specify that return charges apply only when the customer is at fault, using the RBI's illustrative list of non-fault reasons.
Ensure systems re-present technical return cheques in the next clearing cycle within 24 hours (excluding holidays) without requiring customer action.
Set up automated SMS/email alerts to notify customers whenever a cheque is re-presented after a technical return.
Communicate the revised policy to all branches and customers through notices and digital channels.
Acknowledge receipt of this circular and confirm compliance to RBI.
Who it affects
All Scheduled Commercial Banks including RRBs and Local Area Banks, Urban Co-operative Banks, State Co-operative Banks and District Central Co-operative Banks
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What qualifies as a 'technical return' where the customer is not at fault?
RBI provides an illustrative list including reasons like mutilated instrument, image not clear, clearing stamp missing, crossed to two banks, or advice not received. The full list is in the circular's annex.
What is the timeline for re-presenting a technical return cheque?
Banks must re-present such cheques in the immediate next presentation clearing, within 24 hours excluding holidays, and notify the customer via SMS or email.
Can banks still charge for cheque returns in any case?
Yes, but only when the customer is at fault. For technical returns where the customer is not responsible, no charge can be levied.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
RBI’s words: “in accordance with the instructions contained in RBI circular no. DPSS.CO.CHD.No.2030/03.06.01/2012-2013 dated May 7, 2013”
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/493
DPSS.CO.CHD.No. 2030/03.06.01/2012-2013
May 7, 2013
The Chairman and Managing Director / Chief Executive Officer
All Scheduled Commercial Banks including RRBs /Local Area Banks
Urban Co-operative Banks / State Co-operative Banks /
District Central Co-operative Banks
Madam / Dear Sir,
Delay in re-presentation of technical return cheques and levy of charges for such returns
As you are aware, banks are expected to indicate the timeline for realisation of local/outstation cheques in their Cheque Collection policy(CCP) and charges for cheque returns to be levied in an upfront manner with due prior notice to the customers as enumerated in RBI circulars no. DPSS.CO. (CHD) No. 873 / 03.09.01 / 2008-09 dated November 24, 2008 and DBOD.No.Dir.BC. 56 /13.03.00/2006-2007 dated February 2, 2007 respectively.
2. However,recently, instances have been brought to our notice where banks are (i) levying cheque return charges even in cases where customers have not been at fault in the return and (ii) delaying the re-presentation of the cheques which had been returned by the paying banksunder technical reasons. Both of these issues result in unsatisfactory customer service.
3. It is, therefore, considered necessary to streamline the procedure followed by all banks in this regard. Accordingly, banks are advised to adhere to the following instructions with immediate effect:
Cheque return charges shall be levied only in cases where the customer is at fault and is responsible for such returns. The illustrative,but not exhaustive, list of returns, where the customers are not at fault are indicated in the annex .
Cheques that need to be re-presented without any recourse to the payee, shall be made in the immediate next presentation clearing not later than 24 hours(excluding holidays) with due notification to the customers of such re-presentation through SMS alert, email etc.
4. Banks are accordingly advised to reframe their CCPs to include the procedures indicated in paragraph 3(i) and 3(ii) above, and may note to give publicity to their revised CCPs for better customer service and dissemination of information.
5. The above instructions are issued under Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
6. Please acknowledge receipt and confirm compliance.
Yours faithfully,
(Vijay Chugh)
Chief General Manager
Annex
Illustrative but not exhaustive list of objections where customers are not at fault
(Applicable for Instrument and Image-based Cheque Clearing as detailed in Annexure D to Uniform Regulations and Rules for Bankers' Clearing Houses)
Code No.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/493 · issued 07 May 2013. The plain-English explanation above is BankPulse’s own independent summary.
Communicate the revised policy to all branches and customers through notices and digital channels.
⚙️ Operations
Ensure systems re-present technical return cheques in the next clearing cycle within 24 hours (excluding holidays) without requiring customer action.
📜 Compliance
Update your Cheque Collection Policy to specify that return charges apply only when the customer is at fault, using the RBI's illustrative list of non-fault reasons.
Set up automated SMS/email alerts to notify customers whenever a cheque is re-presented after a technical return.
Acknowledge receipt of this circular and confirm compliance to RBI.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (All Scheduled Commercial Banks including RRBs and Local Area Banks, Urban Co-operative Banks, State Co-operative Banks and District Central Co-operative Banks), your first concrete step on “RBI cracks down on unfair cheque return charges and delays” is: “Update your Cheque Collection Policy to specify that return charges apply only when the customer is at fault, using the RBI's illustrative list of non-fault reasons.” (RBI issued this 07 May 2013).
Circular: RBI/2012-13/493 -- RBI cracks down on unfair cheque return charges and delays
Issued: 07 May 2013
Action required: Update your Cheque Collection Policy to specify that return charges apply only when the customer is at fault, using the RBI's illustrative list of non-fault reasons.
Action required: Ensure systems re-present technical return cheques in the next clearing cycle within 24 hours (excluding holidays) without requiring customer action.
Action required: Set up automated SMS/email alerts to notify customers whenever a cheque is re-presented after a technical return.
Action required: Communicate the revised policy to all branches and customers through notices and digital channels.
Action required: Acknowledge receipt of this circular and confirm compliance to RBI.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
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=7971&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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