Negotiable Instruments Act

A bounced cheque happens when the payee is unable to access the funds because the bank rejects the cheque, usually due to insufficient funds or mismatched signatures. In Nepal, the Negotiable Instruments Act 2034 (1977) and the Banking Offences and Penalties Act of 2064 (2008) outline the procedures for handling bounced cheques. Legal action can be taken either through civil lawsuits or criminal prosecution, depending on the intent and circumstances. Fines, penalties, and imprisonment range based on the cheque amount, with serious violations leading to up to five years of imprisonment. To avoid these consequences, it is important for individuals to ensure financial transparency and fund availability when issuing cheques.