Lok Sabha Question No. 1598 (UNSTARRED), answered on 2016-03-04
Subject: Cheque Bounce Cases
Ministry: FINANCE
Asked by: JAYSHREEBEN  PATEL, SANGANNA AMARAPPA KARADI

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

LOK SABHA UNSTARRED QUESTION NO †1598

TO BE ANSWERED ON THE 4 th  MARCH, 2016 / PHALGUNA 14, 1937 (SAKA)

## CHEQUE BOUNCE CASES

## †1598 . SHRIMATI JAYSHREEBEN PATEL: SHRI SANGANNA AMARAPPA:

Will the Minister of FINANCE be pleased to state:

- (a) whether the cheque related frauds have increased manifolds in the country and if so, the details thereof during the last three years and the current year, State-wise;
- (b) the number of cases relating to bouncing of cheques are pending for disposal in various courts of the country, State-wise;
- (c) whether the Government has any proposal to amend the Negotiable Instruments Act to deal with such cases and if so, the details thereof; and
- (d) the other steps taken/being taken by the Government in this regard?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI JAYANT SINHA)

(a) & (b): As reported by the Reserve Bank of India (RBI), the details of cheque related frauds reported by the banks to RBI are given in Annexure-I

(c): The  Negotiable  Instruments  (Amendment)  Bill,  2015,  as  passed  by  the  Parliament, received  the  assent  of  the  President  on  the  26th  December,  2015. The  Negotiable Instruments  (Amendment)  Act,  2015  was  notified  on  29.12.2015  which  is  focused  on clarifying the jurisdiction related issues for filing cases for offence committed under section 138 of the Negotiable Instruments Act, 1881.  The Negotiable Instruments (Amendment) Act, 2015, facilitates filing of cases only in a court within whose local jurisdiction the bank branch of  the  payee,  where  the  payee  delivers  the  cheque  for  payment  through  his  account,  is situated, except in case of bearer cheques, which are presented to the branch of the drawee bank and in that case the local court of that branch would get jurisdiction.   The Negotiable Instruments (Amendment) Act, 2015 also mandates centralization of cases against the same drawer.   The  clarity  on  jurisdictional  issue  for  trying  the  cases  of  cheque  bouncing  would increase the credibility of the cheque as a financial instrument.  This is expected to help the trade  and  commerce  in  general  and  allow  the  lending  institutions,  including  banks,  to continue  to  extend  financing  to  the  productive  sectors  of  economy,  as  the  process  of pursuing  the  cheque  bouncing  cases  relating  to  loan  default  has  been  made  simpler  and efficient through the amendments to the Negotiable Instruments Act, 1881.

(d): RBI has issued circular  on  'Cheque  related  fraud  cases  -  preventive  measures'  vide DBS.CFMC.BC.No. 006 /23.04.001/2014-15 dated November 5, 2014. Banks are advised to review and strengthen the controls in the cheque presenting/passing and account monitoring processes and to ensure that all procedural guidelines including preventive measures are followed  meticulously  by  the  dealing  staff/officials.  Further  banks  are  advised  to  take appropriate precautionary measures  to  ensure  that the confidential information viz., customer  name  /  account  number  /  signature,  cheque  serial  numbers  and  other  related information are neither compromised nor misused either from the bank or from the vendors' (printers, couriers etc.) side.

- *****

Annex-I

| Cheque / Demand Draft related frauds of Rs 1 lakh and above reported by banks   | Cheque / Demand Draft related frauds of Rs 1 lakh and above reported by banks   | Cheque / Demand Draft related frauds of Rs 1 lakh and above reported by banks   | Cheque / Demand Draft related frauds of Rs 1 lakh and above reported by banks   | Cheque / Demand Draft related frauds of Rs 1 lakh and above reported by banks   | Cheque / Demand Draft related frauds of Rs 1 lakh and above reported by banks   | Cheque / Demand Draft related frauds of Rs 1 lakh and above reported by banks   | Cheque / Demand Draft related frauds of Rs 1 lakh and above reported by banks   | Cheque / Demand Draft related frauds of Rs 1 lakh and above reported by banks   |
|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------|
| State / UT wise                                                                 | 2012-13                                                                         | 2012-13                                                                         | 2013-14                                                                         | 2013-14                                                                         | 2014-15                                                                         | 2014-15                                                                         | April 2015 - Dec 2015                                                           | April 2015 - Dec 2015                                                           |
|                                                                                 | No of cases                                                                     | Amount involved Rs in lakh                                                      | No of cases                                                                     | Amount involved Rs in lakh                                                      | No of cases                                                                     | Amount involved Rs in lakh                                                      | No of cases                                                                     | Amount involved Rs in lakh                                                      |
| Andhra Pradesh                                                                  | 3                                                                               | 17.98                                                                           | 10                                                                              | 41.32                                                                           | 4                                                                               | 21.03                                                                           | 5                                                                               | 21.81                                                                           |
| Assam                                                                           | 1                                                                               | 2.67                                                                            | 1                                                                               | 36.40                                                                           | 2                                                                               | 9.95                                                                            | 0                                                                               | 0.00                                                                            |
| Bihar                                                                           | 8                                                                               | 94.90                                                                           | 2                                                                               | 11.11                                                                           | 10                                                                              | 59.90                                                                           | 11                                                                              | 68.16                                                                           |
| Chandigarh                                                                      | 1                                                                               | 1.98                                                                            | 1                                                                               | 1.00                                                                            | 2                                                                               | 11.29                                                                           | 1                                                                               | 2.72                                                                            |
| Chhattisgarh                                                                    | 0                                                                               | 0.00                                                                            | 1                                                                               | 26.00                                                                           | 6                                                                               | 44.46                                                                           | 5                                                                               | 51.88                                                                           |
| Dadra&Nagar Haveli                                                              | 0                                                                               | 0.00                                                                            | 2                                                                               | 12.76                                                                           | 0                                                                               | 0.00                                                                            | 0                                                                               | 0.00                                                                            |
| Daman & Diu                                                                     | 0                                                                               | 0.00                                                                            | 0                                                                               | 0.00                                                                            | 1                                                                               | 9.30                                                                            | 0                                                                               | 0.00                                                                            |
| Delhi                                                                           | 13                                                                              | 244.97                                                                          | 32                                                                              | 158.57                                                                          | 37                                                                              | 364.89                                                                          | 29                                                                              | 368.04                                                                          |
| Gujarat                                                                         | 9                                                                               | 118.83                                                                          | 23                                                                              | 218.89                                                                          | 12                                                                              | 188.84                                                                          | 11                                                                              | 91.88                                                                           |
| Haryana                                                                         | 9                                                                               | 112.51                                                                          | 6                                                                               | 32.42                                                                           | 16                                                                              | 198.48                                                                          | 7                                                                               | 229.84                                                                          |
| Himachal Pradesh                                                                | 0                                                                               | 0.00                                                                            | 0                                                                               | 0.00                                                                            | 0                                                                               | 0.00                                                                            | 1                                                                               | 4.00                                                                            |
| Jammu & Kashmir                                                                 | 0                                                                               | 0.00                                                                            | 0                                                                               | 0.00                                                                            | 1                                                                               | 5.14                                                                            | 0                                                                               | 0.00                                                                            |
| Jharkhand                                                                       | 2                                                                               | 13.39                                                                           | 5                                                                               | 149.48                                                                          | 8                                                                               | 30.67                                                                           | 5                                                                               | 80.96                                                                           |
| Karnataka                                                                       | 12                                                                              | 44.83                                                                           | 4                                                                               | 215.79                                                                          | 16                                                                              | 298.52                                                                          | 4                                                                               | 17.88                                                                           |
| Kerala                                                                          | 2                                                                               | 3.56                                                                            | 4                                                                               | 15.25                                                                           | 0                                                                               | 0.00                                                                            | 1                                                                               | 5.30                                                                            |
| Lakshadweep                                                                     | 0                                                                               | 0.00                                                                            | 0                                                                               | 0.00                                                                            | 1                                                                               | 96.56                                                                           | 0                                                                               | 0.00                                                                            |
| Madhya Pradesh                                                                  | 1                                                                               | 1.95                                                                            | 7                                                                               | 49.99                                                                           | 8                                                                               | 99.90                                                                           | 2                                                                               | 54.54                                                                           |
| Maharashtra                                                                     | 29                                                                              | 610.77                                                                          | 22                                                                              | 171.79                                                                          | 58                                                                              | 608.20                                                                          | 20                                                                              | 176.61                                                                          |
| Orissa                                                                          | 1                                                                               | 1.50                                                                            | 4                                                                               | 117.83                                                                          | 6                                                                               | 65.01                                                                           | 1                                                                               | 1.00                                                                            |
| Overseas Branch                                                                 | 1                                                                               | 202.27                                                                          | 2                                                                               | 149.44                                                                          | 0                                                                               | 0.00                                                                            | 0                                                                               | 0.00                                                                            |
| Punjab                                                                          | 3                                                                               | 21.59                                                                           | 5                                                                               | 19.18                                                                           | 3                                                                               | 29.12                                                                           | 4                                                                               | 25.79                                                                           |
| Rajasthan                                                                       | 6                                                                               | 31.70                                                                           | 3                                                                               | 29.86                                                                           | 5                                                                               | 26.90                                                                           | 7                                                                               | 318.38                                                                          |
| Tamil Nadu                                                                      | 15                                                                              | 123.01                                                                          | 12                                                                              | 184.35                                                                          | 14                                                                              | 124.55                                                                          | 13                                                                              | 197.81                                                                          |
| Uttar Pradesh                                                                   | 19                                                                              | 329.66                                                                          | 21                                                                              | 156.96                                                                          | 30                                                                              | 244.41                                                                          | 30                                                                              | 124.45                                                                          |
| Uttaranchal                                                                     | 0                                                                               | 0.00                                                                            | 2                                                                               | 6.35                                                                            | 2                                                                               | 13.78                                                                           | 0                                                                               | 0.00                                                                            |
| West Bengal                                                                     | 6                                                                               | 259.65                                                                          | 11                                                                              | 74.26                                                                           | 12                                                                              | 59.95                                                                           | 8                                                                               | 20.71                                                                           |
| Grand Total                                                                     | 141                                                                             | 2237.72                                                                         | 180                                                                             | 1879.00                                                                         | 254                                                                             | 2610.85                                                                         | 165                                                                             | 1861.76                                                                         |